Banks, Financial Services, Legislation, Lithuania, Taxation

International Internet Magazine. Baltic States news & analytics Monday, 10.12.2018, 04:23

SEB owes Lithuanian budget a substantial amount

Danuta Pavilenene, BC, Vilnius, 02.09.2014.Print version
The Commission on Tax Disputes in Lithuania ruled in favour of the State Tax Inspectorate which found that bank SEB owes the budget a substantial amount in unpaid taxes. However, the bank may appeal to court, reports LETA/ELTA, referring to Vakaro zinios.

The Seimas Committee on Budget and Finance ascertained last year that in 2012 commercial banks operating in Lithuania paid just LTL 11 million (EUR 3.2 million) in corporate income tax for 2011.

 

Two major banks SEB and Swedbank said they incurred losses in previous years and paid on aggregate a minuscule LTL 3,000 (EUR 869) of corporate income tax, even though in 2011 their income totalled to LTL 970 million (EUR 280 million). The committee raised suspicions that subsidiaries of commercial banks in Lithuania borrowed at significantly higher interest rates than in the market. This way they could artificially create losses, but allow main banks to earn through interest and avoid corporate income tax. The State Tax Inspectorate investigated this possibility among others.

 

The inspection's investigation results have not been made public, however, according to the daily Vakaro Zinios, bank SEB has to pay LTL 26 million (EUR 7.5 million) in corporate income tax, as the bank reduced its taxable profit by loan interest received from the main SEB bank. SEB also has to pay LTL 700 thousand (EUR 200 thousand) in VAT as well as an unspecified fine. Because the bank refused to pay voluntarily, the dispute had to be considered by the Commission on Tax Disputes, which last week ruled against bank SEB – the ruling has also been classified.

 

According to Chairman of the commission Steponas Vytautas Jurna, he could not reveal details without written approval by SEB. "We cannot publicly publish what we learn during investigation. We made a verdict only in relation to SEB, the investigation did not involve Swedbank. As concerns SEB, the ruling is constituted of several parts, it is ambiguous, hence, I cannot say whether it is favourable to the bank or not," said Jurna.

 

In 2013, commercial banks earned LTL 785.5 million (EUR 227.5 million) in Lithuania. Nonetheless, probably little corporate income tax will be paid this year either, due to the fact that in 2009-2010 the banks purportedly incurred a loss of LTL 3.9 billion (EUR 1.13 billion), and in 2011-2013 earned just LTL 2.7 billion (EUR 0.78 billion). Thus previous losses are once again going to be covered at the expense of profit.






Search site