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Lithuania: Corporate income tax incentive for investments in large projects

Lithuania: Corporate income tax incentive

New legislation in Lithuania amends the corporate income tax law to provide incentives for investments in large projects. The law (passed by the Parliament on 30 June 2020, and signed by the president on 3 July 2020) is effective beginning 1 January 2021 through 31 December 2025.

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Qualifying investment projects will be exempt from corporate income tax (if certain conditions are met) for the period from 2021 through 2025.

The new investment incentive is available for entities engaged in large investment projects in the fields of manufacturing, data processing or web-server hosting, and other related activities. The corporate income tax exemption is available for up to 20 years for domestic and foreign entities that make qualifying investments in any location in Lithuania, provided that certain conditions are met, including that:

  • The entity must implement a large investment project under a valid large investment project agreement.
  • The investment is of an amount of at least €20 million (€30 million when investing in Vilnius or its region).
  • The average number of workers needed for the implementation of the investment project during a tax period must be at least 150 persons (200 workers when investing in Vilnius or its region).
  • At least 75% of the company’s income must be derived from manufacturing, data processing or web-server hosting, and other related services.
  • The entity must have an auditor’s opinion confirming that the required amount of private capital was invested.

KPMG observation

The incentive is expected to have a positive impact for businesses and for the Lithuanian business environment in general, and is expected to attract new investors and encourage investments into innovative and growth-oriented businesses and business solutions, as well as enhance Lithuania’s regional competitiveness and create more workplaces.


For more information, contact a KPMG tax professional in Lithuania:

Birute Petrauskaite | +370 655 21 357 | bpetrauskaite@kpmg.com

Ruta Kazlauskaite | +370 612 002 33 | rkazlauskaite@kpmg.com

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.

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