Lithuania

Foreign Account Tax Compliance Act (FATCA) agreement with the United States (US)

Lithuania signed an intergovernmental agreement (IGA) with the United States under the framework of FATCA. Lithuania and the United States will exchange information about the accounts of foreign (US or Lithuania, respectively) residents held in local financial institutions or local branches of foreign financial institutions.

Implementation of base erosion and profit shifting (BEPS) provisions

The OECD has announced a package of BEPS recommendations aiming to increase transparency of international taxation and prevent tax evasion and aggressive tax planning. Many OECD countries, including Lithuania, have already started shifting certain provisions related to implementation of the BEPS recommendation package into their tax legislation (see below).

Hybrid mismatch arrangements

Hybrid mismatch rules aim to prevent obtaining a double non-taxation benefit by exploiting differences between the tax treatment of entities and instruments across different countries. Lithuanian rules state that when the payment is deductible in two countries, or deductible in one country and non-taxable in another, tax discrepancies are neutralised by treating such payment as non-deductible expense or taxable income in Lithuania.

From 1 January 2023, the new amendments to the Law on CIT relating to anti-hybrid rules have come into force (please see Amendments to the tax laws in the Significant developments section).

Controlled foreign company (CFC) rules

Please see Controlled foreign companies (CFCs) in the Group taxation section for more information.

Limitation on interest deductions

Please see Thin capitalisation and EBITDA rules in the Group taxation section for more information.

Mandatory disclosure rules (DAC6)

Please see DAC6 implementation in the Tax administration section for more information.

Country-by-country (CbC) reporting

The CbC reporting obligation applies for multinational groups of companies with consolidated revenue of not less than EUR 750 million. According to the approved rules, the CbC report must be submitted electronically within 12 months after the last day of the taxpayer’s financial year.

Multilateral Instrument

Lithuania signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting ('Multilateral Instrument' or MLI) and deposited its instrument of ratification on 11 September 2018. The Multilateral Instrument entered into force on 1 January 2019 for Lithuania.