Lithuania: Corporate income tax

Corporate income tax. In December an amendment to the corporate income tax law became effective which, among others, raised the threshold of income for the application of the 5% rate for companies having not more than 10 employees to LTL 1 million. This amendment will be applied starting from the tax year 2012.

Tax relief for investment projects may be applied also when a long-term asset has been used for less than 3 years if in the case of restructuring or transfer of the company such an asset is passed to the acquiring company on condition that this company will use it until the end of the 3 year period. This amendment is applied to the tax period of 2011 and later years.

VAT registration/deregistration. According to an amendment to the regulation on registration/deregistration for VAT purposes, as of 1 January 2012, both Lithuanian and foreign entities have to submit the VAT registration form 3 business days before the day in which they wish to be registered or the date when the obligation to register for VAT purposes arises.

Time limits of the procedures related to VAT registration were shortened. Thus the Tax Authorities have to decide on registration of taxable persons within 3 business days after the application form was submitted. The requirement to submit an application form to be registered with the taxpayers’ register when registering for VAT purposes is abolished.

Input VAT. Following a ruling of the European Court of Justice, an amendment to the VAT law was approved which states that a purchaser, who acquires goods or services taxed with VAT by an entity that is not registered for VAT purposes, is entitled to deduct VAT calculated if the goods or services acquired are used in VAT taxable activities. In this case the purchaser registered for VAT purposes must have the invoice or another document for goods or services acquired containing the identification code of the supplier.

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