Lebanese tax authorities demand $1 billion in back taxes from banks

The standoff between Lebanese authorities and the country’s banks has entered a new phase, as lenders push back against a Finance Ministry decision requiring them to pay roughly $1.1 billion in taxes on provisions set aside for potential losses on eurobonds.The dispute began with a formal request submitted by the Association of Banks in Lebanon (ABL) to the Finance Ministry in September 2024.ABL argued that provisions — also described as “hedging mechanisms” — linked to the likely default of the Lebanese state, which stopped servicing its debt in March 2020, should be treated as tax-deductible.But the response, sent on June 19, 2025, was unequivocal. Citing an opinion from the High Commission on Legislation at the Justice Ministry and an internal assessment by its tax department, the Finance Ministry rejected the request, arguing that...