Today, the Government approved the proposal of the Ministry of the Economy and Innovation to exempt from the corporate tax obligation Lithuanian and foreign capital-based investment project promoters which will invest at least EUR 30 million and will create at least 200 new jobs. This amendment to the Law on Corporation Tax will facilitate the development of local and foreign capital-based large investment projects at country level, including the free economic zones.
‘We hope that these amendments will enable the creation of around 2000 new jobs in Lithuania over a period of five years, including the remote regions of the country. Our aim is to ensure the use of various means to attract large and high-employment FDI investment projects and to offer additional incentives for Lithuanian businesses that are willing to expand,’ says Vice-Minister of the Economy and Innovation Marius Skuodis.
The draft Law on Corporation Tax, which is being submitted to the Seimas for consideration, along with the package of draft laws on investment, also known as the ‘green corridor’, already submitted to the Seimas, propose to define a large investment project as a data processing, internet server services and related activities or manufacturing activities project of a value of investment in fixed assets of at least EUR 30 million and creating at least 200 new jobs to be maintained for five years.
‘One of the main constraints on Lithuania preventing from successful competition with other countries in attracting and maintaining investment is a lack of tax incentives for investors implementing large projects. By eliminating this shortcoming we will also gain an additional advantage allowing investors to benefit from faster procedures in the areas of territorial planning, construction, land-use planning, migration and others thanks to both the corporate tax incentive and the green corridor package, ' says Vice-Minister of the Economics and Innovation Marius Skuodis.
The attracted large projects could be carried out in any region of Lithuania and this incentive could therefore help to promote regional development. The implementation of large projects has a significant impact on economic development through the payment of taxes, the purchase of local suppliers’ services, goods and works and the creation of high value-added jobs. Large projects increase productivity levels and generate higher value-added products promoting economic progress as a result.