Lithuania’s parliament is reviewing a Draft Law No. XIVP-3533 to partially implement a global minimum tax. This aligns with their plan to delay some key parts of the tax until 2029. The delay is allowed by EU rules for countries with few large companies.
Key Points of the Draft Law:
- Partial Implementation: The draft law reflects Lithuania’s previously announced plans (September 2023) for a phased approach. It focuses on establishing foundational elements for the global minimum tax.
- Focus on Definitions and Infrastructure: Draft Law No. XIVP-3533 prioritizes establishing clear definitions and administrative procedures for the global minimum tax framework. This includes determining the location of group members and outlining reporting requirements.
- Delayed Application of Core Rules: The draft law defers the application of the two main pillars of the global minimum tax framework: the Income Inclusion Rule (IIR) and the Under taxed Profits Rule (UTPR). These rules would not be enforced until 2030, allowing Lithuania additional time to prepare and ensuring minimal disruption for businesses.
