Lithuania has proposed amendments to establish a formal procedure for assessing research and experimental development works for corporate income tax incentives, with implementing legal acts due by 31 October 2026 and the changes set to enter into force on 1 November 2026 if adopted.
Lithuania has proposed amendments to the Law on Corporate Income Tax that would establish a legal framework for assessing whether activities qualify as research and experimental development works (R&D) for the purposes of applying corporate income tax incentives.
The draft amendments to Article 17¹, dated 25 August 2026, would authorise the Government of Lithuania or an institution authorised by it to establish the procedure for assessing R&D. The proposed rules would apply when determining eligibility for the corporate income tax incentives set out in Article 17¹(1).
The proposed amendment would also change the title of Article 17¹ to “Article 17¹. Costs of R&D works and procedure for the assessment of works”. A new paragraph 5 would provide the legal basis for the assessment procedure.
At present, there is no separate, detailed framework governing this assessment. In practice, the State Tax Inspectorate assesses whether declared activities qualify as R&D or, during tax control cases, refers the activities to the Innovation Agency for assessment.
Under the draft, the Government of the Republic of Lithuania or an institution authorised by it would be required to adopt the implementing legal acts by 31 October 2026.
The amendments will enter into force on 1 November 2026, if adopted.
