Lithuanian black list of low tax territories
Lithuania has included 58 countries to a list of low or no tax states. Transactions with these countries have special regulations and are subject to particular taxes applicable for individuals and legal persons. Special attention is directed towards financial transactions with countries listed below and it is important to know what additional rules and taxes apply to these matters.
Deductions and corporate income tax
According to the Art. 31 of the Law on Corporate Tax, deductions are not allowed for payments from Lithuanian companies (permanent establishments) to foreign companies which are registered or otherwise organised in the below mentioned territories, if a Lithuanian company (permanent establishment) does not provide the information that:
- These payments are connected with the normal (routine) activities of the payer and receiver;
- The receiver of the payments manages the assets needed to perform such routine activities;
- There is a connection between a payment and economically based operation.
All of the sums which are not deducted, are taxed by 15% of Corporate Tax.
Special regulations for individuals
Also, according to the Art. 17 of the Law on Personal Income Tax, most of the non-taxable income is considered taxable if the transaction is made between the parties where one of the parties is registered in the below mentioned territories or if he (she) is permanently established in one of the below mentioned territories.
- Anguilla
- Antigua and Barbuda
- Aruba
- Azores
- Bahamas
- Barbados
- Belize
- Bermudas
- British Virgin Islands
- Brunei Darussalam
- Cayman Islands
- Commonwealth of Dominica
- Cook Islands
- Gibraltar
- Grenada
- Guernsey, Sark, Alderney
- Hong Kong
- Independent State of Samoa
- Isle of Man
- Jamaica
- Jersey
- Kingdom of Tonga
- Macao
- Madeira Islands
- Montserrat
- Netherlands Antilles
- New Caledonia
- Niue
- Oriental Republic of Uruguay
- Republic of Ecuador
- Republic of Mauritius
- Republic of San Marino
- Republic of Venezuela
- Saint Kitts and Nevis
- Saint Pierre and Miquelon
- Saint Vincent and the Grenadines
- St. Helena
- Tahiti Island
- The Principality of Andorra
- The Principality of Liechtenstein
- The Principality of Monaco
- The Republic of Costa Rica
- The Republic of Djibouti
- The Republic of Guatemala
- The Republic of Kenya
- The Republic of Lebanon
- The Republic of Liberia
- The Republic of Maldives
- The Republic of Nauru
- The Republic of Panama
- The Republic of Seychelles
- The Republic of the Marshall Islands
- The Republic of Vanuatu
- The State of Bahrain
- The State of Kuwait
- Turks and Caicos Islands
- United Arab Emirates
- Virgin Islands (US)
Jovita Valatkaite, attorney at law of the Gencs Valters Law Firm in Vilnius.
Practising in fields of Taxation in Latvia, Lithuania and Estonia.
T: +370 52 68 52 50
F: +370 52 61 11 00