Lithuania: New tax laws

Lithuania

Lithuania

The Parliament of Lithuania  has adopted several amendments to the personal income tax law, the corporate income tax law, the VAT law and the law on excise duties.

Personal Income Tax. In order to encourage individuals to get involved into business activities and to motivate those persons to pay income tax imposed on business profits instead of a fixed amount tax by acquiring business certificate, the personal income tax rate has been reduced from 15% to 5%.
This rate will be applied on profits derived from individuals’ business activities like production, trade or most of service supplies. The rate of 15% will continue to be applied on profits from liberal professions, and also on real estate sales and lease as well as revenue from the transfer of securities.
Corporate Tax. The corporate income tax rate of 5% will continue to be applied on profits of enterprises, if income derived from the agricultural activity of that enterprise exceeds 50% of the total amount of income received during the taxation period.
The deadline for the payment of the corporate income tax (the first day after of the tenth month of the next taxation period) has not been changed. Thus the annual corporate income tax return for the taxation periods starting in 2010 and later should be submitted after the end of the taxation period and before the first day of the sixth month of the next taxation.
Excise Duties. In accordance with the EU requirements, as of 2011 the excise duty rate for all types of cigarettes and other tobacco products will be increased.
One of the phases of the transition period for the excise duty on diesel fuel granted to Lithuania by the EU ends this year. From January 2011, therefore the rate of excise duty on diesel fuel will be increased while as of 2011 natural gas will be exempt from excise duty.
VAT Exemptions. With the amendments to the VAT Law, the application of the reduced 9% rate of VAT on heating and hot water, and the reduced 5% rate of VAT on supplies of pharmaceuticals and medical aid was prolonged until the end of 2011. The reduced 9% rate of VAT on books and non-periodical information publications was prolonged for an indefinite period. The Parliament also fixed the reduced 9% rate of VAT on hotel-type and special accommodation services, which would be applied until the end of 2011.

The Parliament of Lithuania  has adopted several amendments to the personal income tax law, the corporate income tax law, the VAT law and the law on excise duties. Personal Income Tax. In order to encourage individuals to get involved into business activities and to motivate those persons to pay income tax imposed on business profits instead of a fixed amount tax by acquiring business certificate, the personal income tax rate has been reduced from 15% to 5%. This rate will be applied on profits derived from individuals’ business activities like production, trade or most of service supplies. The rate of 15% will continue to be applied on profits from liberal professions, and also on real estate sales and lease as well as revenue from the transfer of securities.Corporate Tax. The corporate income tax rate of 5% will continue to be applied on profits of enterprises, if income derived from the agricultural activity of that enterprise exceeds 50% of the total amount of income received during the taxation period.The deadline for the payment of the corporate income tax (the first day after of the tenth month of the next taxation period) has not been changed. Thus the annual corporate income tax return for the taxation periods starting in 2010 and later should be submitted after the end of the taxation period and before the first day of the sixth month of the next taxation.Excise Duties. In accordance with the EU requirements, as of 2011 the excise duty rate for all types of cigarettes and other tobacco products will be increased. One of the phases of the transition period for the excise duty on diesel fuel granted to Lithuania by the EU ends this year. From January 2011, therefore the rate of excise duty on diesel fuel will be increased while as of 2011 natural gas will be exempt from excise duty.  VAT Exemptions. With the amendments to the VAT Law, the application of the reduced 9% rate of VAT on heating and hot water, and the reduced 5% rate of VAT on supplies of pharmaceuticals and medical aid was prolonged until the end of 2011. The reduced 9% rate of VAT on books and non-periodical information publications was prolonged for an indefinite period. The Parliament also fixed the reduced 9% rate of VAT on hotel-type and special accommodation services, which would be applied until the end of 2011.

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