The Tax Authority has clarified what can be assumed to be bribe expenses

The Commentary clarifies that bribery may be considered not only as a direct transfer of funds to a relevant person but also other ways intended to affect some person. The STI emphasized that the expenses incurred with the purpose of bribery are treated as not deductible expenses calculating CIT even though these expenses helped to the company to reach its purposes and regardless bribery form which took place. Below are several examples of expenses which may be treated as bribery (if any):

  • direct or indirect payments through other working or fictitious entities for allegedly provided services or purchased goods;
  • providing support or charity;
  • gratuitously increasing prices of goods or services;
  • incurring representation expenses;
  • paying fictitious or gratuitously increased salary, etc.

If the STI suspects possible criminal activity in the entity, the STI provides information to the law enforcement institutions.

Recent Posts

January 26, 2023

ACCOUNTING IN LITHUANIA

GENERAL INFORMATION Accounting in Lithuania is regulated according to the following legal acts:• Accounting Law of the Republic of Lithuania*;• Business Accounting Standards or International Accounting…

Continue reading
January 26, 2023

PAYROLL IN LITHUANIA

THE BASIC REQUIREMENTS FOR EMPLOYMENT CONTRACT An employment contract shall be concluded in written between the employer and the employee. The contract shall be drawn…

Continue reading
January 19, 2023

BALTIC TAX RATES FROM 1 JANUARY 2023

Estonia Latvia Lithuania Corporate income tax (CIT) rate: CIT is payable upon profit distributions (the deemed profit distribution). CIT rate is 20%, calculated as 20/80…

Continue reading