One of the obligations of a company (UAB, MB, etc.) is to pay taxes, and profit tax is one of them. Therefore, it is important to know what profit tax rate the company (UAB, MB, etc.) has to pay.
Profit tax rates:
15% – standard profit tax rate
5% – preferential profit tax rate
0% – preferential profit tax rate
According to what can a company (UAB, MB, etc.) determine what profit tax rate to pay?
Standard 15% profit tax rate pays the companies (UAB, MB, etc.) that does not meet the conditions for preferential rates.
Every company (UAB, MB, etc.) must take into account certain conditions at the end of the tax period, according to which they can determine what profit tax rate to pay.
The conditions for 5% preferential profit tax rate:
- Annual income does not exceed 300 000 Eur;
- The average number of employees does not exceed 10;
- The controlling shareholder (member)/shareholders (members) together do not control more than 50% of other companies shares (parts) and does not have an individual enterprise.
The conditions for 0% preferential profit tax rate applicable to newly registered units, to the taxable profit of the first tax period:
- Annual income does not exceed 300 000 Eur;
- The average number of employees does not exceed 10;
- The controlling shareholder (member)/shareholders (members) together do not control more than 50% of other companies shares (parts) and does not have an individual enterprise;
- Shareholders (members) only natural (physical) persons;
- During 3 successive tax periods, including the first one, the company’s activities are not suspended, the company is not liquidated, reorganized and the company’s shares (parts) are not transferred.
NOTE! From 01.01.2025 the profit tax rates are changing. The profit tax is increased by one percentage point.
The standard profit tax rate will be 16%.
The preferential profit tax rate will be 6%.