Salaries & Wages Tax
Libyan Salaries and Wages tax applies to all salaries, wages, bonuses and benefits which arise from employment in Libya.
Ahmed Ghattour & Co. provides a flexible payroll service to any entity, depending on the level of involvement our clients wish us to have, ranging from simply processing the payroll to the provision of a one-stop-shop “total service“ which can include the following:
- First time employees’ registration in Libya for tax and social security purposes
- Apply for the exemption of the employer from contributing to Social Security for foreign employees
- Preparation of payroll budgets
- Compute the estimated tax liability of each employee at the beginning of the year
- Compute net payroll for each employee, and ensure the relevant pay is remitted to the employee
- For each payroll run, provide information ranging from pay slips to tailored management information reports
- Pay client dues arising from tax and social security commitments
- Complete Inland Revenue form for the claim of tax allowances
- Handle communications and correspondence with the Inland Revenue, Social Security department, and other government departments
- Provide advisory services in connection with taxation and social security matters
All payroll services referred above are equally applicable to Libyan and to expatriate employees. In the case of expatriate employees, however, we offer the following additional services:
- Advise on and arrange salary payments to employees who are working abroad but are paid through Libya
- Prepare and complete a separate annual return for such employees
- Complete personal tax returns in respect of each employee
- Arrange for personal tax assessments to be raised promptly and obtain individual tax certificates in respect of their salaries and income tax paid
This tax is payable under Law 44 of 1970 and is levied on personal incomes and corporation profits.
Social Security System (INAS)
Social Security contributions are due in accordance with Law 13 of 1980 as amended by Law 1 of 1991.
The contributions are payable by all employees working in Libya whether local or foreign, based on gross income. Contributions may be made either weekly or monthly. The gross salary with regard to foreign nationals is required to include an amount for housing and subsistence regardless of whether this is paid to the employee or not.
INAS is payable on the 10th of the month following the payment of salary, late payment carries a fine of 5% the rate of INAS effective from 1st June 1991.
In addition to the above, Solidarity Fund Contributions are payable by deduction from the employee’s salary.