mrbreeze
From: Lithuania
3/28/2008 04:18 EST
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.
Post a Reply
 0 0 abuse
|
|
noelcor
3/28/2008 11:07 EST
On this topic, I would have to agree with you.Whilst my knowledge isn't as indepth as your own, I do know from talking to Lithuanians that the taxation system in particular is not particularly pro business.Given that Lithuania needs all the new start up companies it can get, its politicians need to have a serious look at creating a more pro business environment for both indigenous and foreign owned businesses.
Post a Reply
 0 0 abuse
|
|
|
|
Abakan
From: Lithuania
4/3/2008 03:58 EST
My experience of the Lithuanian tax system has been different. I have had a sole proprietorship (individual enterprise) here since 2001. I don't have a high income, but I don't pay that much in taxes. There are exemptions, such as for dependents. The first LTL 25 000 is exempt from corporate tax or you can take a lower tax rate, as you like. I pay base social security instead of the full 34 percent.
A regular stock company would hire a chief financial officer who would be able to find all sorts of tax breaks. And we have a couple of enterprise zones (called free economic zones) that offer initial tax breaks. The more prestigious the company, the better the tax breaks they can negotiate. The biggest problem with the tax laws is that they are always changing and not in accordance with the rumours.
Yes, family is more important here. Women get three years job security for maternity leave and decent benefits during that period. I haven't paid attention to paternity leave.
People usually get 4 weeks paid vacation per year here plus holidays.
These are not your problems going into business here. Our market is different than yours. If Lithuanians are not prominent in the company, sales are likely to be slow unless you have a unique product or a much better deal. But if you do not have someone able to read and speak Lithuanian who is on your side and in a position to see and hear everything, theft and slacking can really do you in.
You are also going to have trouble getting people able and willing to work unless you pay decent wages. There is a brain drain still going on. It would be a good idea to train the management team yourself abroad.
And don't make the mistake some companies do of sending the people they don't like abroad in the hopes that they will quit. It will not raise morale or increase sales.
As to work, Lithuanians are more used to a salary than an hourly wage. So they are going to be more relaxed about the time clock and more conscious of completing tasks. Understand how much work they should produce in a given time and assign it rather than watching the clock. Many, many people here work unbelievable amounts of overtime in spite of the labour laws.
Post a Reply
00abuse
|
|
mrbreeze
From: Lithuania
4/3/2008 16:26 EST
Lithuania does not give you a 25.000 LT deduction for dependents. If you can post a link from the tax dept that says so, even written in Lithuanian, I will personally stand in Old Town wearing nothing but my underwear and sing God Bless America. You are all invited to attend.
Post a Reply
00abuse
|
|
Abakan
From: Lithuania
4/7/2008 05:38 EST
Excuse me, but I never said that one received a LTL 25 000 exemption for dependents. I said that the first 25 000 is tax exempt. To be more specific, for individual enterprises, the first 25000 is tax exempt when calculating income for corporate income taxes (pelno mokestis) or you can waive this exemption and use a lower tax rate on the full amount. Since the amount of personal income tax due is calculated on the basis of the company's income, this exemption is passed on to the amount on which personal income tax is calculated.
No LTL 25 000 exemption exists for stock companies.
Now, have I expresssed it clearly enough?
Post a Reply
00abuse
|
|
mrbreeze
From: Lithuania
4/8/2008 04:59 EST
First, let me say that my thread assumes that your business is not operating under their " patent" and is not listed. Second, there is little difference in tax between the individual and UAB. One is a fuel cost write off of only %50 if you do not drive something that is for business like a box truck. As an ind enterprise you can be the only employee, they look the other way if your wife helps out. So some get a UAB if they need workers. With a UAB you need to keep 10.000 in the bank, so some do not like a UAB for this reason. With a UAB you need an accountant to do the books every month, so that is bad too. A UAB limits your liability, while the Ind enterprise does not. The only good accountants work at a company, the freelance ones do not know anything imo. UAB, or ind the bottom line is nobody that has a small business here is making any money. You can't, it is the most unfriendly place in the world for a small business. If you have a small UAB with 5 employees, there are 5 paid holidays in may, how can you pay them and make a profit? I forgot to mention SODRA which is 158 LT a month. For you with the ind ent and all 5 employees if you have a UAB. Business here puts you in a bad mood all the time with all the headaches. This VAT tax even on food is a sin when the people are so poor to start.
Post a Reply
00abuse
|
|
|
|
