How is interest received by foreign units taxed?

Interest received by foreign units not registered or otherwise organized in a country of the European Economic Area (hereinafter referred to as “EEA”) or in a country with which an international treaty for the avoidance of double taxation (hereinafter referred to as “TADT”) is concluded and applied is taxed at a corporate income tax rate of 10%.

Exception: When foreign units are registered or otherwise organized in a country of the EEA or in a country with which an international TADT is concluded and applied, then interest received by such foreign units is not subject to corporate income tax.

When international TADTs provide for lower corporate income tax rates or specify types of income not subject to corporate income tax, then the rates provided for in such treaties or a more favorable tax treatment may be applied.

For more information on different corporate income tax rates set for interest under the respective international TADTs, please see here (only in Lithuanian).