The Lithuanian Parliament has introduced a legislation known as the “solidarity contribution” or windfall tax, which targets credit institutions in Lithuania that are part of the European Union (EU). This tax would be applicable to the excess interest earned in 2023 and 2024 from loans provided to residents of Lithuania.
The tax calculation for the solidarity contribution would be based on 50% of the net interest income, which is the difference between interest income and interest expenses. This tax would be applicable when the net interest income exceeds the average net interest income of the previous four years, specifically from 2018 to 2021 for the year 2023 and from 2019 to 2022 for the year 2024.
The solidarity contribution would be imposed at a rate of 60%. It would need to be reported on an annual basis by the 15th day of the sixth month after the end of the tax year. Additionally, an advance contribution tax has been introduced, meaning that the solidarity contribution would be reported and paid quarterly. It is important to note that the law is currently awaiting the signature of the President of Lithuania.
