Transposition of the provisions of the Council Directive is under preparation: the amendments are relative for large groups of undertakings

The Ministry of Finance has prepared draft laws transposing the provisions of the EU Directive on ensuring a global minimum level of taxation for multinational enterprise groups and large-scale domestic groups. These draft laws propose the full transposition and implementation of the Directive and the introduction of a new top-up tax for groups of undertakings above the EUR 750 million income threshold. The amendments are expected to enter into force on 1 January of the following year.

“The Council Directive aims to tax the profits of large multinational enterprise groups at an effective tax rate of at least 15 %, which would help to ensure that these groups pay a fair share of tax, regardless of the country in which they operate,” Vice-Minister R. Bilkštytė says.

Following the adoption of an amendment to the Law On Ensuring a Minimum Level of Taxation for Groups of Entities transposing the provisions of the Directive, its provisions will apply to the undertakings of groups operating in Lithuania with an annual income of EUR 750 million or more. Undertakings belonging to groups of this size will pay the Lithuanian top-up tax – the amount missing up to 15 % of effective taxation. This tax will be paid on the profits earned by the group of undertakings in Lithuania, reduced by the amount of the exemption, which is related to the value of tangible assets held in Lithuania and the wage costs for employees.

In addition, when a large group of undertakings based in Lithuania also operates abroad, a tax will have to be paid in Lithuania on the profits earned abroad, which were not taxed there at the prescribed minimum level.

Currently, the draft laws have been submitted for consultation with the public. Proposals and opinions on the envisaged amendments are expected by 7 October this year.

Last updated: 25-09-2024

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