The Tax Authority has clarified what can be assumed to be bribe expenses Jul 28
The Lithuanian State Tax Inspectorate
(hereinafter – the STI) has updated the Commentary of Art. 31 Part 20 of the
Corporate Income Tax Law (hereinafter – the Commentary). Art. 31 of the
Corporate Income Tax Law states, that the expenses, incurred while executing
activities prohibited by the Criminal Code, including bribery, are treated as
not deductible expenses calculating Corporate Income Tax (hereinafter – CIT).
The Commentary clarifies that bribery may be
considered not only as a direct transfer of funds to a relevant person but also
other ways intended to affect some person. The STI emphasized that the expenses
incurred with the purpose of bribery are treated as not deductible expenses
calculating CIT even though these expenses helped to the company to reach its
purposes and regardless bribery form which took place. Below are several
examples of expenses which may be treated as bribery (if any):- direct
or indirect payments through other working or fictitious entities for allegedly
provided services or purchased goods;
- providing
support or charity;
- gratuitously increasing prices of goods or services;
- incurring
representation expenses;
- paying
fictitious or gratuitously increased salary, etc.
If the STI suspects possible criminal activity
in the entity, the STI provides information to the law enforcement institutions.