Which expenses are deducted/classified as allowable deductions from the income of companies

Allowable deductions are all expenses actually incurred by the company in the ordinary course of activities necessary to generate income or other economic benefits for the company (e.g. raw materials and supplies, rent of premises, fuel costs, costs of goods sold, etc.). All expenses incurred must be supported by documents bearing the set out requirements. Allowable deductions also include all expenses for employee benefits, provided that such benefits are subject to personal income tax. In addition, sole proprietorships, general partnerships, limited partnerships and small partnerships may also include as allowable deductions the amounts on which, in accordance with Republic of Lithuania Law on State Social Insurance, the owners of sole proprietorships and members of general partnerships, limited partnerships or small partnerships are liable to calculate and pay the state social insurance contributions.