Deferral of the advance corporate income tax declaration and payment term
Companies that currently are exposed to difficulties due to coronavirus are allowed to submit the advance corporate income tax return and to pay the advance corporate income tax for the first quarter until 30 March, instead of 16 March.
Furthermore, companies have the right to change the corporate income tax payment method once a year: to change the advance corporate income tax calculation method and calculate the tax not according to operating results of the previous year but according to expected results. The company willing to change the tax calculation method must specify this when submitting the corporate income tax return.
If the profit of the company that shifts to the corporate income tax calculation method according expected results decreases the payable corporate income tax advance can also decrease or even become zero.
Deferral of income tax declaration
The start of the income tax declaration will not be announced in March. The deferral of the term of declaration and payment until 1 July, in the opinion of the State Tax Inspectorate (hereinafter – the STI), individuals will have enough time to submit correct and timely tax returns. The STI will inform about the start of the declaration by a separate notification.
Term of refund of the ITI overpayments does not change
The term of refund of overpayments of the income tax of individuals (ITI) remains the same. Individuals who submit correct and timely declarations will receive the refund like each year – until 31 July.
Possibility to carry losses forward to other tax periods
According to the procedure established by the Law on Corporate Income Tax all companies that calculate a tax loss during a tax period are allowed to carry the accrued tax losses forward to other tax periods and to reduce by them the taxable profit calculated during such tax periods.
Possibility to defer the payment of taxes
The Law on Tax Administration establishes provisions facilitating the discharge of tax obligations. For example, in the event of temporary financial difficulties taxpayers may submit a request the Tax Inspectorate for deferral or spreading of the accrued debt (tax arrears). In such case, a tax loan agreement (hereinafter – the TLA) shall be concluded with the taxpayer and taxes shall be paid according to the deferral (spreading) schedule specified in such agreement.
With a view to increasing business support measures, the proposal has been prepared for concluding the TLA also with respect to payments of the income tax of individuals (ITI) falling due on 16 March 2020. This will allow businesses that face challenges of operations owing to COVID-19 also to spread ITI in instalments and pay them according to the agreed schedule.
Until adoption of legal acts providing for the increase of business support measures and allowing concluding a tax loan agreement for the ITI (falling due on 16 March 2020), the STI shall not apply tax recovery measures.
Possibility to obtain a loan
A TLA application and other documents necessary for examining the application (specifying in such documents the debt amount, the requested settlement schedule and the reasons for absence of current possibilities to cover the full tax amount) shall be accepted by electronic means via ‘My STI’ section of the STI portal. When taking a decision on the conclusion of the TLA, the STI shall assess each taxpayer’s application individually on the basis of provided information and approved criteria.
The decision to defer or spread the payment shall be taken during the period of up to 30 (thirty) days (from the day of submission of the application and other documents). After announcement of a positive decision on payment deferral or spreading, the person shall conclude the TLA within 10 (ten) business days.
Exemption from submission of a tax return
Those taxpayers, who temporarily do not engage in business (do not conclude or execute any transactions; do not make any settlements with economic entities; do not get any income except for interest on monetary funds available in the taxpayer’s bank accounts), may be temporarily exempted from submission of a tax declaration and/or other documents specified in legal acts.
Employees are eligible to a sick leave
Employees who have minors can apply to a family doctor for a nursing leave. This leave will be compensated by SODRA for 100 %. In such case, the employer will not incur any expenses.
Employees who suffer from a cold in the head, fever or other health disorders are eligible to obtain a sick leave. The first two days of illness shall be paid up by the employer and the remaining days – by SODRA.
Employees are eligible for declaration of an idle time
If the employer is unable to provide the employee with physical or remote work an idle time may be declared for the employee. The payment for the idle time shall be as follows: for the first day – the average wage shall be paid, for the second and third days – two thirds of the average wage, and later – 40% of the average wage when there is no need for the employee to be present at the workplace.
Possibility to organise short time work
Short time is working time that is shortened by up to one half of the employee’s standard working hours fixed by the employer under certain economic conditions established by the Government, when the employee is compensated for the reduction in pay owing to this shortening of working time by paying a short-time work benefit in accordance with the procedure established by the Republic of Lithuania Law on Unemployment Social Insurance.
According to Article 48 of the Labour Code short time may be established when, due to valid economic reasons that objectively exist in a certain territory or sector of economic activity and that are recognised as such by the Government of the Republic of Lithuania, the employer is unable to provide employees with work and there are preconditions for the dismissal of a group of employees. The employer shall pay a half of the wage.
Granting of leave
Employees may be granted annual leave payable according to the regular procedure. Employees may be granted an unpaid leave when there are preconditions established by the law for granting such leave.
Information prepared on the basis of data of the STI and SODRA of 18 March 2020