1 January 2014 marks important changes in Lithuanian taxation policy. These are the most relevant:
CORPORATE INCOME TAX (CIT)
- 1 June will be the date for filing CIT declarations plus paying tax due to the state budget.
- Tax incentives for investment will be extended until 2018. New items are added to the list of long term assets.
- Contributions to funding cinema film productions are allowable against tax twice: contributions will be treated both as allowable expenses and as an amount deductible from CIT.
- Not only bonus payments (tantjemos) as before but also income from any kind of payment to foreign nationals is to be treated as income for CIT purposes.
PERSONAL INCOME TAX (PIT)
- All tax exemptions on sale of shares will be abolished and replaced by a new taxation scheme. Profit from sale of shares exceeding 10 000 Lt will be taxed at a 15 % PIT rate, irrespective of when shares were acquired and how long shares have been owned.
- Offshore enterprises: income from sale of shares will be taxed without any exemptions.
- Reduction of the tax rate for dividends from 20 % to 15 %.
- Interest on investment deposits exceeding 10 000 Lt will be treated as taxable income.
- Interest from loans will be treated as taxable income without exemptions at a standard 15 % PIT rate.
- Income of (except for bonus payments to) foreign nationals who are a management or supervisory board member of a Lithuanian company will be taxed at a 15 % PIT rate.
Interest on loans is still worth paying in 2013 BUT distribution of dividends is preferable in 2014.
If you plan an upcoming sale of shares acquired before 1999 or held more than 366 days without holding more than 10 % of the overall shares in the company within the last three years, selling in 2013 is advantageous.
Yvonne Goldammer (Partner) / Simonas Aleksandravičius (Tax Counsel)
bnt attorneys-at-law Vilnius
Kalinausko 24, 4th floor
+370 5 212 16 27
email@example.com / www.bnt.eu