Current tax issues: helpful takeaways
Financial market expert Gary D Cohn once said that every business is a risky business unless you invest in risk management. The risk management aspects were the focus of the 14th annual CFO Autumn Conference, where WALLESS was brilliantly represented by partner Dr. Aiste Medeliene. She drew the audience’s attention to the current tax issues. Here are a few helpful takeaways:
– The statutory limitation period does not apply to tax losses. The established law practice shows that tax losses must always (even if they were incurred a long time ago) be justified to be used as the State Tax Inspectorate in Lithuania has the right to check their origin for the year they are used and for a few years ahead.
– It is becoming more and more challenging to deduct interest from income. Interest deduction from the loan that is intended to be used to pay dividends may not be allowed if you do not have the money to pay the dividends out when distributing them. Moreover, the new interpretation of the “thin capitalization” rule may result in the inclusion of your bank loan into the calculation of your borrowed controlled capital.
– If your shareholder of Lithuanian company is a foreign company, be prepared to justify its economic substance of it in those periods when dividends are paid.
Here is just a taste of all the hot tax topics – stand by to learn more!