Lithuania: Increased corporate income tax for credit institutions
Lithuania: Increased corporate income tax
Amendments to the law on corporate income tax in Lithuania that were approved by parliament and signed by the president in late December 2019, are effective beginning 1 January 2020. The amendments concern the increased taxation of credit institutions’ profits earned during the tax periods 2020-2022 in Lithuania.
Based on the amendments, an additional 5% corporate income tax will be applied to profits exceeding €2 million per tax period of commercial banks (including branches of foreign commercial banks), credit unions and central credit unions. This is in addition to the standard (flat) 15% corporate income tax rate applicable in Lithuania.
Different calculation rules will apply when determining profits subject to the additional corporate income tax. Credit institutions will be unable to deduct certain expenses when calculating taxable profits subject to the additional tax. The additional corporate income tax will have to be reported using a specific tax return. Nevertheless, the general deadlines will apply for submitting the return and paying the additional tax liabilities.
Tax professionals have said that the additional corporate income tax may be discriminative against one specific sector. Based on the opinion of the European Central Bank, these changes may have a negative impact on the Lithuania’s financial system and economy.
For more information, contact a KPMG tax professional in Lithuania:
Birute Petrauskaite | +370 6552 1357 | email@example.com
Rūta Kazlauskaitė | +370 6120 0233 | firstname.lastname@example.org
© 2022 KPMG LLP, a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.
For more detail about the structure of the KPMG global organization please visit https://home.kpmg/governance.
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.