Social Security contributions have been increased as part of the Social Security Reform which came into effect in January 2014. It was decided that the rates will be increased gradually in phases.
As of 01 January 2017, Social Security contributions in the Private Sector are as follows:
Tax Residency Definition
The Lebanese Parliament legislated Law no. 60 at the end of 2016, relating to the amendment of Law no. 44, Tax Residency in Lebanon.
Residency is to be understood as follows:
Any natural person is considered tax resident in Lebanon if they:
- Have a place of business in Lebanon; or
- Have a house in Lebanon permanently available to them or their family members (i.e. the spouse and dependent children); or
- Is present in Lebanon for more than 183 days in any given 12 months’ period.
The 183 days will not include:
- Days spent in transit at the International Airport Beirut; or
- Days in Lebanon, if the stay was solely for undergoing a medical treatment.
The residency criteria for individuals refer to a place of business, and on the other hand, they also include houses in Lebanon available to the individual or his family. Lebanon has a significant number of people working outside Lebanon either permanently or temporarily. Generally, these people still own houses in Lebanon that are available to them.
Therefore, this wide definition has certainly exposed many people being resident in two countries. Where there is a Double Tax Treaty between the two concerned countries, individuals need to apply Article 4 of the specific treaty to establish their tax residency. In the absence of a treaty, these people remain a resident in two countries with the potential risk of double taxation.
Changes to the labour Law
A work-sponsorship system, known as Kafala, currently requires all foreign workers to obtain their employer’s consent to travel abroad or switch jobs. The Qatari government confirmed new regulations to the Kafala sponsorship law, making it easier for migrant workers to change jobs and leave the country. This came into effect at the end of December 2016.
Key highlights of the changes:
- Single exit permits have been abolished.
- No government fees for exit permits applicable.
- The sponsor will need to be informed that the expatriate plans to leave the country and will have an opportunity to object against this (applicants will be able to appeal against any such objections).
- Expatriates who finish fixed contracts will need the permission of the government, rather than the consent of their sponsor, to take up another job.
- Employers are not allowed to retain the employee’s passports.
- All the employees must sign an employment contract.
- Substantial fines and/or penalties will be applied to sponsors who hold the passport of their employees.
What employers need to know:
- An employment contract needs to be in place for all the employees.
- The terms mentioned in the employment contract need to be reviewed and should be based on the format approved by the Ministry of Labour.
- Salaries outlined in the employment contract need to be paid in Qatari riyals into a Qatari bank account which is in line with the Wage Protection System requirements.
- Substantial fines and/or penalties will be applied for non-compliance with above.
Currently, companies pay a levy of SAR 200 per month per expatriate employee (for expatriate employees that exceed the number of Saudi employees). This levy will be increased gradually every January, until 2020.
Companies that have more Saudi employees than expatriate employees will no longer be exempt, but will benefit from a discounted levy.
Furthermore, a new fee on dependents of expatriate employees will be levied as of July, 2017. The fee will be SAR 100 per dependent per month, and will increase gradually every year until 2020.
Levies per expatriate summarised below:
The fees do not apply to domestic workers such as cleaners and drivers.
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