The Ministry of Finance of Lithuania issued a proposal to amend the Law on Corporate Income Tax on 3 September 2015. If approved by parliament the amendments will enter into force on 31 December 2015.
Under the proposed amendments, anti-abuse rules adopted under the European Union Parent-Subsidiary Directive (recast) (2011) will be incorporated into the Law on Corporate Income Tax as follows:
- Dividends will not be exempt from withholding tax if a tax benefit is the main purpose or one of the main purposes of the relevant transaction. This rule will be enforced in relation to cases of tax avoidance concerning transactions performed without commercial reasons reflecting economic reality; and
- Dividends will not be tax exempt if such dividends are tax deductible by the subsidiary.
