Lithuanian Banking Association appeals to EC over new tax

The Lithuanian Banking Association (LBA) has complained to the European Commission over a new tax that is proposed to be imposed on financial institutions in Lithuania. According to the LBA, the new taxation model would distort competition as some financial market participants would be exempt from the tax and this should be treated as unlawful state assistance that potentially contradicts EU law.

The Ministry of Finance has proposed that banks would pay the so-called temporary solidarity contribution in 2023 and 2024, a 60% tax on net interest income if net interest income exceeds the latest four year average by 50%.