Taxation of royalties in Lithuania

As of the end of July, 2011 Lithuanian tax inspection applies new practice – royalties paid out to the company registered in other EU state are not taxed. Before that the withholding tax rate applicable to royalties was 10%. Royalties will be tax exempt if satisfying certain requirements such as – the company must be registered in other EU member state, company receiving royalties is not generally tax exempt company (does not apply 0% tax rate); receiving company is not the agent or intermediary and receives the royalty to its own benefit, the company receiving and the paying the royalty are bound by at least 25% share part.