Tax incentive
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Relevant to
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Main
conditions
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0%
reduced rate of Corporate Income Tax
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Small
companies on the first year of operation
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- For 3 years, the company is not restrained, the company is not
liquidated or reorganized, and the shares are not transferred to other
participants;
- The number of employees does not exceed 10;
- The income does not exceed EUR 300.000;
- The shareholders are individual persons.
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5%
reduced rate of Corporate Income Tax
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Small companies
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- The number of employees does not
exceed 10;
- The income does not exceed EUR
300.000;
- The controlling terms specified in
the Law are met.
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Transfer
of tax losses between group companies
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Group of companies having both profitable and
loss-making companies.
The
profitable company can reduce its taxable profit by the amount of transferred
losses.
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- Losses are transferred between group of companies which are controlled
by the same parent company controlling no less than 2/3 of voting rights;
- The companies participating in the transfer of losses belong to the
same group of companies for a period not shorter than 2 years or will belong
to the same group of companies for at least 2 years from the company’s
registration date (if a newly registered company is participating in the transfer
of losses).
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Incentive
for investment project
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Companies
expanding their activities and investing in capital assets.
Companies can reduce
its taxable profit by the amount of investments incurred (up to 100% of
taxable profit) (applicable from 2018). Tax incentive might
be used up to year 2023.
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- The assets acquired pertains to
groups of fixed assets stipulated in the Law (e.g. machinery and equipment,
computer equipment, etc.);
- The assets purchased must be new
and previously unused;
- The assets are directly involved
in the process of production or rendering of services;
- The assets will be used by the
company for at least 3 year;
- Other conditions.
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Film
production incentive
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Companies
that have provided gratuitous funds for the production of a film or a part of
it in Lithuania
Companies
can reduce its payable Corporate Income Tax (up to 75%) by the fund provided
for the film making
Tax
incentive might be used up to year 2018.
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- The film meets the criteria for cultural content and production;
- At least 80 percent of all production costs of the film or its part
are incurred in the Republic of Lithuania and are not less than EUR 43 000;
- The total amount of all Lithuanian units or foreign units through
their permanent establishments in the Republic of Lithuania does not exceed
20% of the total cost of production of the film or its part;
- A certificate has been received regarding the use of gratuitous funds
compliance with the requirements (investment certificate).
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Incentive
for research and experimental development activities (REDA) (for costs)
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Companies carrying
out research and experimental development activities
The costs can be
deducted three times
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- Research and / or experimental
development work is related to the company's ongoing or planned activities;
- The documentation of REDA work
approved by the director of the company or its authorized person is received,
which describes the work performed by the REDA (their objectives, course of
execution, other important information);
- It is recommended, but not obliged to have an assessment of the
activities of the Research, Innovation and Technology Agency, and the expert
findings that the activity meets the requirements of the REDA activities.
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Incentive
for research and experimental development activities (REDA) (for the profit)
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5%
reduced rate of Corporate Income Tax for the profit generated by the use,
sale or other transfer of R & D activities (copyright protected computer
programs or patented inventions).
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- The income is received by the company that created the asset and only
it will bear all the costs associated with the mentioned incomes;
- Incomes are earned on the basis of copyrighted software programs or
patented inventions.
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The
donation
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Donation can be
deductible twice from taxable profit (if the amount of support is up to 40%
of taxable profit).
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- Support is provided to the unit
having the status of the recipient of donation;
- The amount of donation in cash
does not exceed EUR 9 500;
- If the amount of support exceeds
40% of the taxable profit, the excess is considered as a non-deductible
expense for Corporate Income Tax purposes;
- For companies with a tax loss, all
support costs are considered as non-deductible expense for Corporate Income
Tax purposes.
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