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International Internet Magazine. Baltic States news & analytics Friday, 29.03.2024, 09:54

Lithuanian businessmen actively lured to move to Estonia

BC, Vilnius, 06.03.2017.Print version
Lithuanian businessmen are actively receiving offers to move their businesses to Estonia – they are promised a zero tariff on undistributed profits and saving possibility, as well as all company founding procedures finalized within a day. However, tax advisers say that even if the move slips by the State Tax Inspectorate, the taxes paid in Estonia may be even higher than in Lithuania.

"Do not accept the offer," the portal cited Saule Dagilyte, tax partner at Sorainen law office, saying that the tax advantages in Estonia are limited – the main advantage, in comparison to Lithuania, is that companies are not required to pay profit tax every year, as the tax only applies on distributed profits. Meanwhile, profit-making companies in Lithuania pay taxes on an annual basis. The profit tax tariff in Estonia is 20%, as compared to 15% in Lithuania, which is one of the smallest tariffs worldwide. However, Estonia is the only country in the European Union that does not require paying the profit tax until the profit is distributed.


Arvydas Avulis, Lithuanian businessman who moved his Hanner holding to Estonia, said Estonia was more favorable for international companies: "If you are an international company, moving to Estonia is a beneficial and right thing go do. However, if your operations are only in Lithuania, this is not the way. We work in other countries and must have a holding in one of the countries to have the shares of the other companies. Today it is more beneficial to have the holding in Estonia than in Lithuania."

 






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