Libya Investment Income Guide 2026

Overview

Since Libya does not impose personal income tax on individuals, investment income earned by individuals (dividends, interest, rental income, royalties) is generally tax-free at the personal level. Corporate recipients include investment income in their taxable profits. Cross-border payments to non-residents are subject to withholding taxes at rates specified in domestic law or reduced under applicable double tax treaties.

Dividends

Dividends paid by Libyan companies are not subject to withholding tax when paid to Libyan residents. For non-residents, the withholding tax rate on dividends is typically 5-10%, depending on applicable treaty provisions. Corporate shareholders resident in Libya include dividend income in their taxable profits subject to CIT at 20% + 2%. There is no dividend imputation system.

Interest

Interest income earned by individuals is tax-free since there is no personal income tax. Companies include interest income in their taxable profits. Interest paid to non-residents is subject to 5% withholding tax, unless reduced under a double tax treaty. Interest paid to Libyan banks and financial institutions may be exempt from withholding.

Royalties

Royalties received by individuals are not taxable at the personal level. Corporate recipients include royalties in taxable income. Payments of royalties to non-residents are subject to withholding tax at 5-10%, depending on the nature of the royalty and applicable treaty. Libya defines royalties broadly to include payments for the use of intellectual property, patents, trademarks, and technical know-how.

Double Tax Treaties

Libya has a limited network of double tax treaties, primarily with Arab League countries and certain African nations. Treaties generally provide reduced withholding tax rates on dividends, interest, and royalties. In the absence of a treaty, domestic rates apply. The Libyan Tax Authority may require a tax residency certificate to apply treaty benefits.

FAQs

Do I pay tax on dividends from Libyan companies?

As an individual resident in Libya, dividends are not taxable. As a non-resident, dividends are subject to withholding tax at 5-10%.

Is bank interest taxable in Libya?

No, individuals do not pay tax on bank interest. Companies include interest in their CIT computation.

Can I claim a foreign tax credit on overseas investment income?

Libyan tax residents can generally claim foreign tax credits for withholding taxes paid on foreign investment income, subject to domestic law and treaty provisions.

Disclaimer

This guide provides general information about Libyan investment income taxation for the 2026 tax year. Tax laws may change. Always consult with a qualified Libyan tax advisor or the Libyan Tax Authority for advice specific to your situation. InvestmentKit does not provide tax advice.