Lithuania

Key facts Lithuania taxation

The Baltic region is a very important intersection point for both transport and trade roads in the middle of the European continent. Further, Company owners get the opportunity to obtain a visa and move freely throughout Europe;

Public limited liability company (AB)

  • minimum share capital is about EUR 43.500, at least 25% have to be paid up;
  • at least one shareholder is required, resident or non-resident;
  • shareholders are liable for its obligations to the extent of its entire property;
  • minimum three directors are required;

Private limited liability company (UAB)

  • minimum share capital is about EUR 2.500, at least 25% have to be paid up;
  • at least one shareholder is required, resident or non-resident;
  • shareholders are liable to the amount of the capital invested;
  • there is no requirement for board or supervisory council;
  • annual audits are required if turnover exceeds EUR1.4m;

European company (SE or Societas Europaea)

Its purpose is to merge or form a holding of companies governed by the law of different Member States. The subscribed capital of an SE may not be less than EUR 120.000. Lithuanian public and private limited liability companies may incorporate an SE. An SE comprises a general meeting of shareholders, a supervisory council (or another supervising body), a board and a manager. The obligatory bodies are the general meeting of shareholders and the manager. Employees of an SE are entitled to participate in the management of the SE and in adoption of decisions vital to the operations of the company.

Taxation

  • Corporate income tax is 15%; Micro companies (those with up to 10 employees and up to EUR 300,000 in income per year) may be entitled to a reduced rate of 5%;
  • Dividends tax is 15%, unless the participation exemption applies;
  • Dividends received from a foreign entity registered in an EEA member state and whose profits are subject to corporate income tax or an equivalent tax are exempt from tax;
  • Capital gains are taxed as general taxable income, at a rate of 15%;
  • Operating losses may be carried forward indefinitely if the entity continues carrying on the activity that resulted in the losses. However, losses carried forward cannot offset more than 70% of taxable income;
  • Royalties paid to a nonresident company are subject to a 10% withholding tax, unless the rate is reduced under a tax treaty or eliminated in accordance with the EU interest and royalties directive;
  • VAT is 21%, with reduced rates of 9%, 5% and 0%.