CORPORATE INCOME TAX RATES IN LITHUANIA

  • 2011-03-23
  • By Arturas Gutauskas, Associate Lawyer

ECOVIS Miškinis, Kvainauskas ir partneriai advokat┼│ kontora

According to the Law on Corporate Income Tax of the Republic of Lithuania, the general corporate income tax rate is 15 percent. Taxable profits of entities (except for non-profit entities), whose average number of employees on the staff list does not exceed 10 and whose income during the tax period does not exceed 500,000 litas (144,810 euros), are taxed at a rate of 5 percent. This tax rate reduction does not apply if the same person controls over 50 percent of shares (interests, member shares) in any other Lithuanian or foreign entity or if he has a personal enterprise (or if his family member does or has).
Taxable profits of entities in which more than 50 percent of whose income during the tax period consists of income from agricultural activities, including income of cooperative societies (cooperatives) from the sold agricultural products acquired from their own members produced by those members, are taxed at a rate of 5 percent.

The part of the taxable profits of non-profit entities whose income from economic and commercial activity during the tax period does not exceed 1 million litas, is taxed at a rate of 0 percent, and the remaining part of the taxable profits is taxed at a rate of 15 percent. Income directly allocated for financing of activities carried out when satisfying public interests is not attributed to the income received from economic and commercial activities of non-profit entities. 
Taxable profits of entities that have the status of a social enterprise are taxed at 0 percent if they have enough special employees and do not carry out non-supported activities.

Despite this brief description of corporate income taxation in Lithuania, the specific corporate income tax rate should be applied only after detailed evaluation of each particular entity.