Date de publication : 06-10-1907
The following information are for the sole purpose of providing a general overview of the local taxation of the Corporate tax aspects of the country. In any case, it can not replace a tax advice, or be considered as an official information.
Yes we tax in Lithuania
New tax reform: No specific information
New tax treaties: No specific information
Local tax advisors
No specific information on the local tax advisors.
The definition of Permanent Establishment follows the wording of article 5 of the OECD Model:
- Dependent agent who habitually concludes contracts in the name of a non-resident company (except is the activity is limited to purchase of goods);
- Fixed place of business, building site, construction, assembly or installation and any related supervisory activity.
Resident companies are taxed on their worldwide income.
The definition of resident company for tax purposes, corresponds to the definition of the OECD Model Convention. As per article 4 of the OECD Model Tax Convention, a person is treated as resident of a contracting state if he is liable to tax in such a country by virtue of his domicile, residence or place of management or any other similar criterion.
Entities are considered to be resident for tax purposes in Lithuania if their place of management & control is in Lithuania.
Note: the definitions of permanent establishment and place of residence are subject to the relevant provisions of any applicable double tax treaty, if any.
Corporate Income Tax
The general CIT tax rate is 15%.
Non-taxable income includes the following:
- Dividends (participation exemption provided that the holding company held at least 10% of the voting rights, during 1 year)
- Certain capital gains;
Non-deductible expenses includes the following:
- Dividends benefiting from the participation exemption
- Interest in excess of the thin-capitalization threshold
- CIT and VAT that cannot be reclaimed
Carry forward: Yes indefinitely, but some restrictions may apply
Carry back: No
Companies should submit the tax return annually before the 15th of June of the following year.
Annual tax returns are established by the company on a self-assessment system.
Companies shall pay quarterly advance payments.
Whithholding Taxes (payment to foreign companies)
The local tax rates in Lithuania are the following, subject to the provisions of an applicable double tax treaty, if any.
There is no WHT on the profits paid from a branch to its foreign head office.
The general rate of WHT on dividends is 15%.
The general rate of WHT on interest is 10%.
The general rate of WHT on Royalties is 10%.
The general rate of WHT on management fees is 0%.
The general rate of WHT on technical services is 0%.
Capital gains are taxed as general income under the regular CIT.
Note: in certain cases capital gains are not taxable (i.e. transfer of shares of a company who is subject to CIT in its country, the seller held more than 25% during at least 3 years, and the shares are not transferred back to the issuer of the shares).
Standard VAT tax rate is 21%
Reduced tax rates are:
- 9% (among others, newspaper, passenger transportation services, tourism,… );
- 5% (among others, pharmaceuticals products, ..;)
Zero-rated supplies include, subject to certain conditions:
- exports of goods;
- Supply, maintenance, repairs related to vessels engaged in commercial international traffic;
- transport of goods and services directly related to import and export of goods;
- Passenger transportation.
Exempt supplies include, subject to certain conditions:
- Financial services ;
- Insurance services ;
- Personal health care services;
- Training and education ;
- Postal services ;
Note: exempt transactions differ from zero-rated transactions in that the input VAT associated with exempt transactions is not deductible.
EU taxable companies may claim a VAT refund to their own tax authorities through on the basis of the 13th EU Directive.
Certain non-resident companies (which are not required to register and incur Lithuanian VAT in the course of their business activities in Lithuania) may apply for a refund.
No other specific information of VAT in Lithuania.
The general statute of limitation is 5 years.
There is no foreign exchange control in Lithuania. Income and capital can be freely repatriated.
There are thin capitalization rules in Lithuania. The interests derived from loans between related parties may not be deductible in case where interest exceeds some ratios.
Do not hesitate to share your experience in Lithuania with us in the comments below. Any comments are welcome !
Romain, poète dans l’âme, aime particulièrement le couscous et passe beaucoup de temps à glacer ses souliers. Profil LinkedIn