image
Ask our legal expert!
Gencs Valters
image
images
Ask our legal expert!
Gencs Valters
Claim your FREE copy
Doing Business Guide in the Baltics.

Personal Income Tax in Lithuania 2014

26 November 2013
Facebook Twitter Linkedin

Lithuanian Seimas enacts amendments to Personal income tax (PIT) law.

 

Among the welcome improvements is lowering of PIT for most common transactions. Since 2014, dividends and royalties to management and supervisory board members will be charged with 15 % PIT, compared to 20 % before 2014.  Worth to mention that 15 % Personal Income Tax will be applicable in cases where decision on payment of dividends and/or royalties proclaims payments to be made after 2014 JAN 1.

 

However new amendments generally put burden on investors shoulders by taxing deposits, interest from long term government securities, and some share sales transactions which Lithuania granted exemption before 2014. In this manner Lithuania introduces progressive taxes, leaving investors with 10 000 LTL non taxable minimum (NTM) for each base of income.

 

Among the amendments is imposition of PIT on interest received from deposits held in EEC member state’s banks.  Interest received from bonds and other securities, issued by governments  of EEC member states, which re-buy start after 1 year or later will also be levied with 15 % PIT after the new year.

 

Another “facilitation” for investors and shareholders is that interest from loans given to one’s own company, as well as other loans given on interest, which repay commences 1 year after, will be charged 15 % PIT, save for 10 000 LTL non taxable minimum (NTM) counted on all interest source income.

 

As from 2014 Jan 1st  Lithuania also withdraws tax exemption on sale of shares and securities obtained before year 1999. Sale of shares, securities and derivatives which were obtained after year 1999, held in ownership for more than 1 year and who’s title was less than 10 % of company’s shares for 3 years prior sales, no longer qualify for exemption. These transactions are subject to 15 % PIT, save for 10 000 LTL NTM.

 

Income source

Current

PIT

Personal income tax since 2014


Sales of securities

 

 

Sale of shares and securities obtained prior year 1999

0 %

15 % for sales after 2014

10 000 LT NTM, on all “profits from sales of financial instruments” source income

Sale of shares/securities/

derivatives

Obtained after year 1999, ownership more than 1 year, held less than 10 % of shares for 3 years prior sale

0 %

15 % for sales after 2014

10 000 LT NTM, on all “profits from sales of financial instruments” source income

Interest

 

 

Interest from deposits held in EEC member states banks

0 %

0 if contract prior 2014

15 % for later contracts

10 000 LT NTM, on all “interest “ source income

Interest from securities issued by EEC member states governments and territorial departments

0 %

0 if obtained prior 2014

15 % for later acquisitions

10 000 LT NTM, on all “interest “ source income

Interest from loans

Which repayment starts after 1 year or later

0 %

15 %

Interest from other securities, which repayment starts after a 1 year or later

0 %

15 %

10 000 LT NTM, on all source  interest income

Dividends, royalties and other payments

 

 

Dividends and royalties to management and supervisory board members

 

Other payments to management and supervisory board members

20 %

 

 

0%

15 %

Under decision payment should be made after 2014 JAN 1st

For questions, please, contact Valters Gencs, attorney at law at info@gencs.eu


folow us folow us folow us rss

The material contained here is not to be construed as legal advice or opinion.

© Gencs Valters Law Firm, 2016
Submit
Claim your FREE copy
Doing Business Guide in the Baltics.