Personal Income Tax in Lithuania 2014
 law.
Among the welcome improvements is lowering...)
Lithuanian Seimas enacts amendments to Personal income tax (PIT) law.
Among the welcome improvements is lowering of PIT for most common transactions. Since 2014, dividends and royalties to management and supervisory board members will be charged with 15 % PIT, compared to 20 % before 2014. Worth to mention that 15 % Personal Income Tax will be applicable in cases where decision on payment of dividends and/or royalties proclaims payments to be made after 2014 JAN 1.
However new amendments generally put burden on investors shoulders by taxing deposits, interest from long term government securities, and some share sales transactions which Lithuania granted exemption before 2014. In this manner Lithuania introduces progressive taxes, leaving investors with 10 000 LTL non taxable minimum (NTM) for each base of income.
Among the amendments is imposition of PIT on interest received from deposits held in EEC member state’s banks. Interest received from bonds and other securities, issued by governments of EEC member states, which re-buy start after 1 year or later will also be levied with 15 % PIT after the new year.
Another “facilitation” for investors and shareholders is that interest from loans given to one’s own company, as well as other loans given on interest, which repay commences 1 year after, will be charged 15 % PIT, save for 10 000 LTL non taxable minimum (NTM) counted on all interest source income.
As from 2014 Jan 1st Lithuania also withdraws tax exemption on sale of shares and securities obtained before year 1999. Sale of shares, securities and derivatives which were obtained after year 1999, held in ownership for more than 1 year and who’s title was less than 10 % of company’s shares for 3 years prior sales, no longer qualify for exemption. These transactions are subject to 15 % PIT, save for 10 000 LTL NTM.
|
Income source |
Current PIT |
Personal income tax since 2014 |
|
Sales of securities |
|
|
|
Sale of shares and securities obtained prior year 1999 |
0 % |
15 % for sales after 2014 10 000 LT NTM, on all “profits from sales of financial instruments” source income |
|
Sale of shares/securities/ derivatives Obtained after year 1999, ownership more than 1 year, held less than 10 % of shares for 3 years prior sale |
0 % |
15 % for sales after 2014 10 000 LT NTM, on all “profits from sales of financial instruments” source income |
|
Interest |
|
|
|
Interest from deposits held in EEC member states banks |
0 % |
0 if contract prior 2014 15 % for later contracts 10 000 LT NTM, on all “interest “ source income |
|
Interest from securities issued by EEC member states governments and territorial departments |
0 % |
0 if obtained prior 2014 15 % for later acquisitions 10 000 LT NTM, on all “interest “ source income |
|
Interest from loans Which repayment starts after 1 year or later |
0 % |
15 % |
|
Interest from other securities, which repayment starts after a 1 year or later |
0 % |
15 % 10 000 LT NTM, on all source interest income |
|
Dividends, royalties and other payments |
|
|
|
Dividends and royalties to management and supervisory board members
Other payments to management and supervisory board members |
20 %
0% |
15 % Under decision payment should be made after 2014 JAN 1st |