Losses carry forward limitations:

Beginning in 2014, the ability of corporations in Lithuania to carry forward tax losses, for corporate income tax purposes, is limited. In calculating their corporate income tax for 2014 and subsequent tax periods, entities may carry forward tax losses, but the offset of losses may not exceed 70% percent of the taxable profit for a tax period.

The limitations on loss carry forwards also apply to the losses of financial institutions related to disposal of securities and/or derivatives, and with respect to loss carry forwards relating to reorganizations, mergers and acquisitions (M&As), and restructuring of entities. The procedure for carrying forward losses of non-financial institutions relating to the disposal of securities and derivatives is not changed—i.e., the five-year tax loss carry forward rule still applies.

Extended incentives:

As of 2014, the period and the applicability of the tax incentive for investment have been extended. The period of investment incentives for certain groups of fixed assets has been extended (applicable 2009-2018). Companies may reduce their taxable profits by up to 50% by deducting the amount of expenses incurred for investment in certain fixed assets (machinery and equipment), computer hardware and software, communication equipment, and acquired rights. As of 2014 the tax incentive also applies for acquisitions of trucks, trailers, and semitrailers. The investment assets must be new and produced not more than two years prior to the date for the start of the use of the asset. Part of the acquisition costs of fixed assets, which has not been used during the tax year, may be carried forward, but not more than four years.

VAT rates:

The value added tax rates in Lithuania have been reduced for certain goods and services, effective 1 January 2014:

A reduced VAT rate of 5% applies for an indefinite period to medicine and medical aid equipment for expenses reimbursed by health insurance. A reduced VAT rate of 9% applies until 31 December 2014 for thermal energy supplied to heat residential premises.

Reduced rates of individual income tax on dividends, interest:

The rate of individual income tax on dividends and other amounts distributed from profits to individuals is subject to a reduced rate of 15%. Before 2014, the rate of individual income tax on dividends and profit distributions was 20%. Also beginning from 2014, the rate of individual income tax on payments of interest on loans (without regard to when the loans were granted) is 15%.