Employer Tax Contributions

Tax Type	Rate (Employer)	Base
Social Security	14.35% (Libyan entities), 15.375% (foreign companies)	Gross Salary
Corporate Income Tax	20%	Taxable Profits
Jehad Tax (Corporate)	4%	Taxable Profits
Stamp Duty	0.5%	Payments to Tax Department

Filing & Compliance

• Employers must register with the Libyan Tax Authority and the Social Security Fund.
• Monthly tax declarations and remittance of withheld income tax and social security contributions are due by the 15th day of the following month.
• Annual tax returns must be filed within four months of the fiscal year-end or one month after the approval of audited accounts, whichever is earlier.

In Libya, both Libyan and foreign nationals are taxed on employment income earned within the country. Several deductions and contributions are factored into the final net pay.

Tax Rates and Deductions

• Personal Income Tax (PIT): A progressive tax system is applied:
  • 5% for annual income up to LYD 12,000
  • 10% for annual income exceeding LYD 12,000
• Jihad Tax: Calculated on taxable income:
  • 1% on income up to LYD 50 per month
  • 2% on income up to LYD 100 per month
  • 3% on income exceeding LYD 100 per month
• Additional Tax for Palestinian Nationals: 7% on income.
• Social Security Contribution:
  • Employee: 3.75% of gross salary
  • Employer: 11.25% of gross salary (Total 15%)
• Social Unity Fund Contribution: 1% of the monthly gross salary.

Exemptions and Allowances

Personal allowances are deductible from the taxable income:

• LYD 1,800 for single individuals
• LYD 2,400 for married individuals
• LYD 300 for each dependent child under 18 years old. For expatriates to claim married or child allowances, their family must reside in Libya.

Deductible Expenses

The following expenses can typically be deducted:

• Life insurance premiums
• General insurance premiums
• Social security contributions
• Medical insurance contributions
• Direct work-related expenses
• Disciplinary fines

Tax Administration and Filing

• Filing Status: Individual filing is mandatory; joint filing is not permitted.
• Tax Withholding: Employers withhold and remit income tax, typically within 60 days following the end of the month, with a 15-day grace period.
• Penalties: Late payment penalties are 1% per month, up to a maximum of 12%.

General Information and Considerations

The information provided is based on the best available sources as of February 5, 2025, and is subject to change due to potential legal and regulatory updates. It's crucial to consult official Libyan tax authorities or seek professional tax advice for the most current and accurate information. This overview should not be considered financial or legal counsel. Always verify details with relevant authorities before making tax decisions.