Lithuania: income threshold

Alessandro PasutThe commentary of the Corporate income tax law regarding the application of a 5% was supplemented. The amended commentary sets forth that, when determining if the income of a taxable period of an entity does not exceed Litas 1 million, the total income of the entity sourced in Lithuania and outside Lithuania has to be calculated.

When an entity performs activities through a permanent establishment in another foreign state, the total income of the Lithuanian entity and income earned abroad through a permanent establishment have to be calculated, except for dividends received.

When this relief is applied to a permanent establishment of a foreign entity in Lithuania, the total income of the foreign entity including income of the permanent establishment earned in Lithuania has to be calculated.

The commentary also explains that income from agricultural activities has also to be calculated by considering income earned through a permanent establishment abroad and income of a foreign entity from agricultural activities earned though a permanent establishment in Lithuania.

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