Increased corporate income tax for credit institutions
Increased corporate income tax for credit institutions
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.
KPMG observation
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 | bpetrauskaite@kpmg.com
Rūta Kazlauskaitė | +370 6120 0233 | rkazlauskaite@kpmg.com
© 2024 "KPMG Baltics", UAB, a Lithuanian limited liability company 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://kpmg.com/governance.