Expat Community > Lithuania

mrbreeze
Joined 2007
Posts: 46

Starting a business in LT

16 years ago

Forget it! I will try to explain the tax system. You get no tax base here. In the U.S. on federal depending on the size of your family you can get about the first 14 k as a credit before you start paying tax. Here, it starts from the first penny you make. Second, in the U.S. you first calculate the tax you owe, then deduct your business expenses from that hoping to reduce that owed amount to zero. Here you can make up to 100.000 Lt and pay %15 tax rate. But, if from that 100 you had 20.000 in business expenses they give you 2 choices. 1, don't take the 20.000 deduction and pay %15 of the 100.000 which is 85.000 or, take the 20.000 deduction and pay %24 tax on the 80.000! You lose from the start! They treat a 1 man company like it was Kraft foods. The labor laws here make it impossible to have an employee. 3 weeks paid vacation after 6 months. Holiday pay, there are about 4 holidays a month here, 5 in may. If a mans wife gets pregnant HE can take 2 yrs off, and you have to hold his job. There is more, but you get my point. After you make 100.000 Lt, your tax rate becomes %33.

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