aA
The Parliament of the Republic of Lithuania approved an amendment to the Law on Personal Income Tax submitted by the Ministry of the Economy and Innovation, which lays down more favourable conditions for option taxation – employees who have retained the shares of the company acquired through options for more than three years will not be subject to personal income tax, "Startup Lithuania" writes.
Changes in option taxation prepared
© DELFI / Kiril Čachovskij

“More attractive conditions of option taxation should particularly encourage the establishment and development of those start-ups that at the beginning of their operation are unable to pay competitive wages. Therefore, granting of shares to the employees and their attractive taxation becomes an attractive alternative and possibility to attract the most talented specialists. Whereas this constitutes one of the most important aspects of the legal regulation of start-ups, Lithuania will become more attractive not only to the local but also to foreign start-ups that so far preferred to choose other countries that apply more favourable conditions of option taxation”, – says Virginijus Sinkevičius, the Minister of the Economy and Innovation.

An amendment to the Law on Personal Income Tax prepared by the Ministry of the Economy and Innovation, and accepted by the Parliament provides that the employee’s benefit from the options after the acquisition of shares not earlier than 3 years after the rights to options were granted is not subject to Personal Income Tax.

So far, an employee who realizes options and receives shares needed to pay taxes immediately on the difference between the acquisition price of the shares and their fair market value, even without earnings. Such a procedure of option taxation complicated the conditions for attracting start-ups and retaining employees, left no other choice for companies but to choose other countries.

This proposal is one of the parts of “Program 1000”, the project for start-ups that was prepared by the Ministry of Economy and Innovation. It is aimed at creating a more favourable business environment for the establishment and growth of start-ups, and at increasing the number of start-ups operating in Lithuania to 1000 by 2020.

DELFI EN
It is forbidden to copy the text of this publication without a written permission from DELFI.
|Populiariausi straipsniai ir video

Tax revenue 15 percent short of target in March

The Lithuanian central government's tax revenue fell around 15 percent short of the target in March,...

Avia Solutions Group bought Bluebird Nordic

On the 24th of January 2020, Avia Solutions Group signed an agreement with BB Holding EHF for the...

GetJet Airlines set to lay off 370 employees

Lithuania's wet-lease and charter services provider GetJet Airlines has given lay-off notices to 370...

Avalanche of ideas developed in 'Hack the Crisis' hackathon

One of the most important tasks for hackathon organizers was to identify the most pressing issues,...

Lithuania and some other EU countries ask for Mobility Package postponement

Lithuania and "like-minded" EU member states are urging the bloc's bodies to postpone the...

Top news

649 confirmed coronavirus cases in Lithuania

On 2nd April there were 649 confirmed COVID-19 cases in Lithuania.

Tax revenue 15 percent short of target in March

The Lithuanian central government's tax revenue fell around 15 percent short of the target in March,...

Disinformers take advantage of COVID-19 crisis

“Pharmaceutical industry denies the fact that vitamin C kills coronavirus ”, “Lithuania has...

Lithuania bans all passenger air and ferry travel from Saturday

The Lithuanian government on Wednesday imposed a ban, effective from Saturday, on all passenger air...

US organization expands its cooperation with Lithuanians in fight against Chinese disinformation

The Alliance for Securing Democracy , an independent organization operating in the United States ,...

|Maža didelių žinių kaina