2012-12-12 12:21

Lithuania's new government ponders zero tax on reinvested profit

Lithuania's new center-left coalition is considering reintroducing a zero-percent corporate tax rate for reinvested profits, Prime Minister-designate Algirdas Butkevičius has said.
Mokesčiai
Mokesčiai / Andriaus Ufarto/BFL nuotr.

He said in an interview to LRT Television on Monday that this would help promote industrial growth and attract investments from abroad.

Lithuania scrapped a zero tax rate on reinvested profits in early 2002. Dalia Grybauskaitė, who then held the post of the finance minister, supported the move, saying that the tax break went against EU requirements.

Estonia has a zero tax rate for reinvested earnings, but the country's companies and foreign business entities pay a 21-percent tax on distributed profits, including dividends and other payments.

Lithuania now has a flat corporate profit tax of 15 percent.

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