Lithuania has amended its definition of a “reverse hybrid entity” to comply with the EU Anti-Tax Avoidance Directive (ATAD2). Previously, a Lithuanian entity was considered a reverse hybrid if it was owned by a tax resident of a foreign country, and that foreign country treated the entity as a separate taxable person, while Lithuanian law treated the entity as transparent for tax purposes. The new definition expands the percentage ownership condition to 50% or more, and it also applies to entities that are not collective investment vehicles. Law No. 2023-12400, which amended the definition of a reverse hybrid entity, entered into force on 23 June 2023.
Related Posts
Lithuania extends PIT deadline for investment account taxpayers
April 10, 2026
The Lithuanian State Tax Inspectorate has extended the deadline for filing the personal income tax (PIT) return and paying the tax due for certain taxpayers using the investment account regime, with the order published on 31 March 2026. Under the
Read More
Lithuania: VMI clarifies rules for transferring tax losses within corporate groups
April 06, 2026
Lithuania's State Tax Inspectorate (VMI) has provided updated guidance for Article 56-1(1) and (9) of the Corporate Income Tax Law, applicable for calculating taxable profit for periods beginning in 2026. These provisions regulate the transfer of
Read MoreLithuania: VMI issues draft amendments for crypto-asset reporting rules under DAC8
March 31, 2026
Lithuania's State Tax Inspectorate (VMI) published on 24 March 2026 draft amendments to the rules on reporting information about reportable crypto-asset users, aligning with the Amending Directive to the 2011 Directive on Administrative Cooperation
Read More
Lithuania: VMI updates corporate income tax guidance on partnerships, dividends
March 27, 2026
The Lithuanian State Tax Inspectorate (VMI) published updated guidance on 18 March 2026, revising its official commentary on the Corporate Income Tax Law to clarify the taxation of profits distributed by unlimited liability entities and the
Read More
Lithuania: Government ratifies tax treaty with Pakistan
January 26, 2026
Lithuania’s government approved the ratification of the income tax treaty with Pakistan on 21 January 2026. Signed on 23 September 2025, this tax treaty aims to prevent double taxation and strengthen measures against tax evasion and profit
Read MoreLithuania: MoFA confirms termination of Lithuania-Russia tax treaty
January 07, 2026
Lithuania’s Ministry of Foreign Affairs (MoFA) has confirmed that the 1999 tax treaty with Russia ended on 1 January 2026. The termination follows Lithuania’s adoption of Law No. XIV-2991 on 10 October 2024, after Russia suspended several
Read More