Lebanon’s draft budget, approved by the Council of Ministers on 8 March, plans to cut the corporate tax rate to 20% on the revenue of upstream oil and gas producers from the 25% originally planned. The corporate revenue tax is generally 15% in Lebanon. However, Beirut plans to impose a 25% capital gains tax on the sale of oil and gas assets: capital gains from asset sales have not hitherto been taxed in Lebanon.
In line with the E&P model contract that was published by decree in January 2017, gas producers must pay a royalty of 4%. The royalty on crude oil varies from 5% (for output below 15,000 b/d) to 12% (for 100,000 b/d-plus). The sharing of “Profit Petroleum” (a term that includes both crude oil and gas) between the state and the companies will be determined by a profitability factor known as the “R-Factor,” depending on percentages that the companies are to propose during the bidding process. (CONTINUED - 226 WORDS)
