REPUBLIC OF LITHUANIA
LAW
ON SMALL ENTERPRISES
Article 1. Objectives of the Law
This law shall establish the basic principles of stimulating
the activities of small enterprises.
Small enterprises shall function in pursuance of all the
laws regulating the activities of enterprises, with the exception
of specific requirements provided for in this Law.
This law shall not apply to state enterprises and state stock
companies, as well as to the activities specified in the list
approved by the Government of the Republic of Lithuania which are
not liable to be stimulated.
Article 2. Definition of Small Enterprise
A small enterprise shall be an enterprise with the total
number of employees not in excess of 100.
Article 3. Tax Reliefs
For the period of two years from the entry into force of
this Law or from the founding of a new enterprise, the rate of
tax on profits imposed on small enterprises with rights of legal
persons as prescribed by the Law on Taxes on Profits of Legal
Persons, and the rate of income tax imposed on small enterprises
with rights of natural persons as prescribed by the Provisional
Law on Income Tax of Natural Persons shall be reduced by 70
percent, and, beginning with the third year, by 50 percent,
provided the total number of employees in said enterprises is
not in excess of 50, and the income received from productive
activity amounts to not less than two-thirds of all income
generated from the sale of goods and services.
For small enterprises whose income received from productive
activity amounts to less than two-thirds of all income generated
from the sale of goods and services, said tax rates shall be
reduced by 50 percent.
In accordance with the norms specified herein, income tax of
natural persons shall be levied on the portion of profits of
operating small enterprises which is allocated for the payment of
bonuses or other incentives; upon computing taxable profit, said
amounts shall be deducted from balance profit.
Upon computing taxable profit or taxable income, all
expenditures and investments related to scientific research,
design and construction work, and introduction of new technology
shall be deducted from gross income.
Article 4. Tax Credit
The payment of taxes on profits (income) prescribed by law,
for small enterprises with the number of employees from 51 to 100
whose income from productive activity amounts to not less than
two-thirds of all income generated from the sale of goods and
services, shall be deferred (tax credit shall be given) for not
longer than three years.
For other small enterprises with the number of employees
specified above, the payment of taxes on profits (income) shall
be deferred for one year.
An enterprise which has repaid not less than 50 percent of
the given tax credit shall be entitled to a tax credit in the
ensuing period.
Article 5. Privileges for the Crediting Party
Enterprises and banks of all types of ownership which give
credit to small enterprises on easy terms, are entitled to a 30
percent reduction of the rate of tax on profits (income) equal to
the amount of the credit given.
Article 6.
A simplified procedure of accounting of and accountability
for the results of their productive activity shall be applied to
small enterprises. The procedure shall be established by the
Ministry of Finance of the Republic of Lithuania.
Vytautas Landsbergis
President
Supreme Council
Republic of Lithuania
Vilnius
20 December 1992
No. I-2125