Law No. 7 of 1378 AH (2010 CE) Regarding Income Taxes

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Law No. (7) of the Year 1378 AH (2010 CE) Regarding Income Taxes

The General People's Congress,

• Implementing the decisions of the Basic Popular Conferences in their annual ordinary session for the year 1377 AH,
• And after reviewing the Declaration on the Establishment of the People's Authority,
• And the Great Green Charter on Human Rights in the Age of the Masses,
• And Law No. (20) of the Year 1991 CE Regarding the Enhancement of Freedom,
• And Law No. (1) of the Year 1375 AH Regarding the System of Work of the Popular Conferences and Popular Committees,
• And the Civil and Commercial Procedures Law,
• And Law No. (2) of the Year 1986 CE Regarding the Real Estate Tax,
• And Law No. (28) of the Year 1369 AH Regarding the Livestock and Poultry Tax,
• And Law No. (11) of the Year 1372 AH Regarding the Income Tax Law,

Has drafted the following Law:

( Chapter One ) General Provisions

Article ( 1 ) Every income generated in the Great Socialist People's Libyan Arab Jamahiriya from any assets located therein, whether tangible or intangible, or from any activity or work conducted therein, shall be subject to tax. Income generated abroad shall be subject to tax in the circumstances stipulated in this Law.

Article ( 2 ) Tax shall be assessed based on a declaration submitted by the taxpayer regarding their income, and the tax must be paid based on this declaration after the deadline for submission has elapsed, within the periods referred to in Article (19) of this Law.

Article ( 3 ) Tax shall be finally assessed on each taxpayer based on the declaration referred to in the preceding article if accepted by the Authority, and the assessment in this case shall not be subject to appeal.

Article ( 4 ) Without prejudice to the penalties stipulated in this Law, if the taxpayer refuses to submit the declaration referred to in Article Two of this Law, the Authority may estimate the income as it deems appropriate and assess the tax based on this estimation, in accordance with the controls specified in the Executive Regulations.

Article ( 5 ) The Authority must, in all cases, notify the taxpayer of the tax assessment and its payment deadlines, and the taxpayer has the right to appeal this assessment before the Primary Committee within forty-five days from the date of notification.

Article ( 6 ) Primary committees, established and appointed by a decision of the Secretary, shall adjudicate appeals submitted by interested parties regarding tax assessments and penalties imposed under the provisions of Chapter Four of this Law. Their locations and jurisdictions and members' allowances shall be determined. Each committee shall be presided over by a judge from the Primary Court within whose jurisdiction the committee's seat is located, chosen by its general assembly, and shall include two officials from the Planning and Finance sector, neither of whom holds a rank lower than the ninth, provided they are not employees of the Tax Authority. The composition may include a number of alternate members. The committee shall adjudicate the appeal within a period not exceeding two months from the date of submission.

Article ( 7 ) The Primary Committee has jurisdiction to adjudicate all disputes between the taxpayer and the Authority.

Article ( 8 ) The appeal shall be submitted via a petition deposited with the Primary Committee's Secretariat against a receipt, accompanied by proof of payment of a fee amounting to (1/2%) half a percent of the disputed tax, not less than ten dinars. The Committee Secretary shall send a copy of the appeal petition to the Authority to submit its opinion within thirty days from the date of notification. The Committee Chair shall set a date for hearing the appeal, notifying both the taxpayer and the Authority at least one week in advance. The taxpayer shall be refunded the fee paid for the appeal if the Committee's decision is in their favor. In case of partial success, the Committee shall determine the portion of the fee to be refunded. The Committee may request the Authority and the taxpayer to provide necessary data and documents, and Authority officials and the taxpayer may appear before the Committee. The taxpayer may authorize another person to appear on their behalf.

Article ( 9 ) The Committee's sessions shall not be valid unless all its members are present. Its sessions shall be confidential, and its decisions shall be made by majority vote. Decisions must be reasoned and signed by the Chair and members within thirty days of issuance. The Committee Secretary shall notify both the taxpayer and the Authority of its decisions.

Article ( 10 ) The tax shall be due upon notification of the Primary Committee's decision, even if appealed.

Article ( 11 ) Both the Authority and the taxpayer have the right to appeal the Primary Committee's decision before the Appellate Committee referred to in the next article, within fifteen days from the date of notification.

Article ( 12 ) One or more Appellate Committees, established and appointed by a decision of the Secretary, shall adjudicate appeals submitted against Primary Committee decisions. Their seat, jurisdiction, and members' allowances shall be determined. Each shall be composed of the President of the Primary Court within whose jurisdiction the committee's seat is located, presiding, one member of the Financial Audit Apparatus not lower than the tenth rank, nominated by the Secretary of the General People's Congress of the Apparatus, and one expert in commercial or accounting matters. The establishment decision may include alternate members. The committee shall adjudicate the appeal within a period not exceeding three months from the date of submission.

Article ( 13 ) The appeal shall be submitted via a petition deposited with the Appellate Committee's Secretariat against a receipt. The Committee Secretary shall notify the other party of a copy of the petition to submit their opinion within fifteen days from notification. If the appellant is the taxpayer, they must attach proof of payment of a fee amounting to (1%) one percent of the tax assessed by the Primary Committee, not less than twenty dinars. The provisions and procedures regarding appeals before the Primary Committee shall apply to appeals before the Appellate Committee, including fee refunds. The Appellate Committee's decision shall be final.

Article ( 14 ) Each committee shall have a Secretary appointed from among the Authority's employees by the Authority Secretary.

Article ( 15 ) Without prejudice to stipulated penalties, no appeal or petition submitted by corporate taxpayers shall be accepted unless supported by documents or books and accounts mandated to be kept under the Law.

Article ( 16 ) The burden of proof before the Primary or Appellate Committees lies with the appellant.

Article ( 17 ) The Authority may conduct a settlement with the taxpayer upon request at any time before the Primary Committee issues its decision on the appeal. The Authority Secretary shall form settlement committees. Each committee shall consist of three Authority employees, none of whom conducted the initial tax estimation subject to settlement. If a settlement is reached, the appellant shall be deemed to have withdrawn their appeal, and the competent committee shall be notified accordingly.

Article ( 18 ) If the Authority verifies that the taxpayer failed to submit a declaration, submitted an incorrect or incomplete declaration, concealed an activity or documents, provided false data, used fraudulent means to evade all or part of the tax, or concealed taxable amounts, the Authority may conduct an additional assessment, without prejudice to penalties stipulated in this Law. The Authority may, on its own initiative or upon the taxpayer's request, amend the original assessment in case of errors in estimating or calculating the tax. The Authority must notify the taxpayer of any modification to its assessment, stating the basis for the original or additional assessment and the reasons for the modification. The additional assessment shall be subject to appeal like the original assessment.

Article ( 19 ) Except in cases stipulated otherwise, tax shall be collected in a single lump sum if it does not exceed one hundred dinars. If it exceeds that, it shall be collected in four installments. Installments shall fall due periodically from the tenth to the twenty-fifth day of each month of Spring, Summer, Fath, and Kanun. The tax or its first installment shall be paid on the first available date following the due date.

Article ( 20 ) Without prejudice to other penalties, a fine of (1%) one percent of the due tax value shall be imposed for late payment or submission within the specified deadline for each delay lasting a month or a part of a month not less than fifteen days, such that the fine does not exceed (12%) twelve percent of the value. This fine shall be collected at the same time the tax is collected.

Article ( 21 ) The tax debt is payable at the Authority's office without the need for a demand at the debtor's location.

Article ( 22 ) The tax year is the twelve-month period starting from the first of Al-Nar of each year. However, if the nature of the taxpayer's activity requires their financial year to differ from the tax year, and their accounts are regular, the Authority Secretary may decide to adopt the taxpayer's financial year as the basis for tax assessment.

Article ( 23 ) If the taxpayer is prevented from managing their activity or assets, or is not resident in the Great Socialist People's Libyan Arab Jamahiriya, the manager or holder of those assets shall be considered their representative regarding the application of this Law's provisions.

Article ( 24 ) If the taxpayer