Tax rates in Libya

Company Tax

Flat rate of 20%

Tax Rate For Foreign Companies

Income generated in Libya from assets held in the country or work performed therein is subject to income tax in Libya. Branches are subject to the same taxes as subsidiaries.
A“deemed profit” basis of taxation may apply where a foreign entity is not registered at the time of contracting, it does not hold statutory books in Libya, or the books are not maintained in accordance with local regulations. The level of deemed profit applied to turnover varies according to the branch's type of business activity.
Qualifying companies under the Investment Law are exempt from the income tax for a period of five years (along with customs and stamp duties). Strategic infrastructure projects may be eligible for similar exemptions.

Capital Gains Taxation

Capital gains are treated as income and taxed at the standard rate of 20%.
For entities assessed on a deemed profit basis, capital gains should be added to the deemed taxable income.

Main Allowable Deductions and Tax Credits

Depreciation of tangible and intangible property can be deducted at rates varying from 2% (building without fixed machines) to 50% (software). Goodwill and start-up expenses can be amortised over five years on a straight-line basis. Bad debts that are legally recognised can be deductible.
Charitable contributions to institutions recognised by the state can be deductible up to 2% of the net income.
Net operating losses can be deducted for up to five years. However, losses incurred by upstream oil and gas companies may be carried forward for 10 years.
The Libyan Income Tax Law has no provision for the carryback of losses and the deduction of interest expenses, fines and taxes.

Other Corporate Taxes

Social security contributions payable by the employer amount to 10.5% of the gross salary (11.25% for foreign companies).
Contracts for the provision of services or supply are generally subject to stamp duty (between 1% and 3%). The duty on main contracts is 1% and on subcontracts is 0.1%. A duty of 0.5% is payable to the tax authorities.
Libya does not levy property or transfer taxes.

Other Domestic Resources

Consult Doing Business Website, to obtain a summary of the taxes and mandatory contributions.

Tax Rate

Allowable Deductions and Tax Credits

Social security contributions, direct expenses incurred in relation to the working activity and disciplinary fines are deductible.
A lump-sum deduction of LYD 1,800 per year applies to single taxpayers (goes up to LYD 2,400 for married couples with no children, married, widowed or divorced taxpayers with children are eligible for an additional deduction of LYD 300 per child).

Special Expatriate Tax Regime

Individuals are taxed on Libya-source income. There is no special regime for expatriates.