Europe’s Digital Nation

R&D: Companies that develop new technologies and carry out qualified innovative R&D activities may benefit from a triple deduction of scientific research and experimental development costs from the income. Losses may be carried forward indefinitely. Additionally, a shorter depreciation period is foreseen for certain capital assets used in the R&D activities Such accelerated depreciation may shorten the period up to two years (when usually it is written-off within 3-8 years).

An IP box incentive was introduced by applying a reduced 5% rate of tax for profits from the commercialization of R&D activities. Jobs and CAPEX: Companies located in the SEZ can enjoy 0% CIT.

Jobs creation & CAPEX: Larger projects in manufacturing, data centers, and server hosting may benefit from a Green Corridor for Large Scale Projects (LSP) nationally. The package off­ers tax incentives, including 0% corporate tax for up to 20 years, and streamlines key processes in land acquisition, planning, construction, and migration. To qualify, the project must meet not only quantitative criteria (based on CAPEX, number of created jobs, and timeframe) but also qualitative ones (that focus on location, share of exports, required qualifications of workers, and impact on the economy and competitiveness of Lithuania). 

Employment costs may be covered by Invest LT+ programme, aimed at both manufacturing and BSS projects. After meeting quantitative and qualitative criteria (entry thresholds are much smaller than within the LSP programme) and a positive assessment of the impact of the project on the economy, the eligible costs related to employment costs (e.g. salaries, supplements, sick pay, overtime) may be partially reimbursed.

Training:  Training and apprenticeship costs may be reimbursed up to 70% (up to a limit). What is more, under the LSP the government offers additional soft benefits that link the needs of LSPs with funding for vocational schools and scholarships and adjusting the teaching programs to the needs of business.

Green and other:  As a de minimis aid there is a financial incentive for newcomer specialists to help with relocation costs. As the country strides towards Industry 4.0, grants for the development and implementation of RPA and AI solutions are available for global BSS that export at least 80% of specific services. It may cover up to 50% of costs but is limited to EUR 200,000. The assessment of the projects depends on the project’s efficiency calculated as the ratio of planned saved FTEs and the requested financing. There is also a programme to support newcomer specialists with relocation costs (approx. EUR 3,000).

The companies investing in technological renewal are offered an opportunity of decreasing taxable profits by the investment amount by up to 100%.