Groups of companies pay one fifth of corporate income tax in Lithuania

Groups of companies in Lithuania pay 20% of the total corporate income tax collected in Lithuania, according to an analysis by the Organisation for Economic Co-operation and Development (OECD), reports Verslo žinios.

Local and foreign multinational groups in Lithuania pay a similar amount in the tax as in the Czech Republic, more than in Latvia (13%), but much less than in Finland (32%), Germany (45%) or Ireland (95%).

A European Union directive is set to enter into force from 2024, obliging Lithuania and other member states to apply a minimum effective corporate tax of 15%.

The Finance Ministry says preliminary estimates show that a small positive fiscal impact on corporate income tax revenues could be expected, accounting for around 0.06% of GDP. This would be equivalent to around 2.5% of last year’s income from corporate income tax, or around EUR 36 million, Verslo žinios writes.

Lithuania’s budget revenue from corporate income tax was EUR 1.42 billion in 2022 and is expected to grow to EUR 1.81 billion in 2024, or 10.6% of total state budget revenue.