Tax Consulting
We have significant experience in providing tax consulting services. Therefore, we can efficiently identify tax risks, tax saving opportunities and make recommendations for reducing identified risks.
Assessment of substance in the group structure
Taking into account global trends, initiatives of the Organization for Economic Cooperation and Development, EU directives and the practice of the Lithuanian Tax Authorities, it is of utmost importance to properly implement the structure of the group in order to avoid tax risks.
These questions can help to assess the tax risks of your group structure:
- Does the group contain “letterbox” companies?
- Have you paid dividends, interest, royalties which you have not taxed?
- Have financing transactions resulted in a tax benefit in a group?
- Has the group structure been chosen for tax purposes?
- Would it be difficult to justify the transfer pricing of intra-group transactions and the profitability of group companies?
If at least one of the answer is affirmative, we can help you to:
- Evaluate structure of the group, the substance of transactions and related tax risks
- Provide recommendations for strengthening the substance
- Help to reduce potential tax risks in other ways
- Evaluate tax savings and optimization opportunities
Tax structuring
In case of reorganisation of a group of companies, acquisition and sale of a new company, property or business, ask:
- Have I chosen the appropriate financing mechanism?
- Have I evaluated all acquisition/transfer methods and their tax consequences?
- Have I considered how to extract cash of the company in an optimal way?
- Do I know what tax consequences are expected for other future actions (selling, investing, reorganizing investments)?
We can help you identify and evaluate different structuring scenarios and offer the appropriate solution, taking into account both tax and legal and business aspects.
Tax strategy
In the light of constantly changing international tax laws, companies are facing pressure to develop an effective tax strategy in line with the regulatory landscape. To remain successful, companies must seek efficient solutions.
We can help you to:
- Evaluate whether you have taken all possible advantages of tax reliefs
- Assist in applying the tax reliefs available based on the requirements of the tax laws as well as practice of the Tax Authorities
- Provide tax advantages and disadvantages of foreign jurisdictions that are considered for establishment of the company
- Identify risk related to actions implemented or planned to be implemented and recommend ways to minimize such risk
Rulings from the Tax authorities
Companies often have tax issues that are not clearly regulated either in tax laws or discussed in tax commentaries. The Tax Authority often suggests to submit a written request for a ruling if the questions are more complex. If you have such type of situation, it is very important to:
- Properly evaluate your situation
- Precisely describe the current situation, attach relevant documents
- Present arguments for your proposed tax treatment based not only on provisions in tax laws but also taking into consideration the Lithuanian case-law, decisions of the European Union Court of Justice and general tax principles
- Consider the proposed tax treatment from all taxes point of view
- Do not forget to contact the Tax Authority for its preliminary opinion before it issues a final ruling
- Provide additional arguments based on the preliminary opinion of the Tax Authority
We regularly interact with the State Tax Inspectorate, the Ministry of Finance and the Tax Dispute Commission, therefore, we are well aware of the changes in tax practice and we can prepare well-grounded requests for the rulings.
We are members of the Investors' Forum, actively provide comments to the draft laws and their official commentaries, make significant influence to the tax practice in Lithuania and we are well acquainted with the goals of various tax changes.
Consultation on permanent establishment risks
The world becomes more global, companies more often carry out activities in several countries, so it is very important to assess whether such activities do not create tax obligations in other countries.
A foreign entity that has started business in Lithuania, or a Lithuanian company that has started business abroad, has to assess the tax consequences related to such activities in both jurisdictions.
These questions can help to assess the tax risks of your activities in another country:
- Does your activity in another country last longer than 6 months?
- Do you have an employee, an agent or a representative in another country?
- Do you send employees for long-term business trips or regular work to other countries?
- Do you have an office, branch or representative office in another country?
- Do you carry out construction, assembly or equipment installation projects abroad as a general contractor or a subcontractor?
- Are you carrying out the exploration and extraction of natural resources projects abroad?
If at least one of the answer is affirmative, we recommend a more detailed assessment of tax risks arising in another country.
We can help to assess the permanent establishment risks in Lithuania, to analyze the consequences of personal taxation and to recommend an appropriate structure of the activity.
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