Which costs cannot be deducted from foreign unit permanent establishment income

In calculating the profits of a permanent establishment, the following expenses cannot be deducted from the income earned by the permanent establishment:

• the non-allowable deductions set in Annex 31 of Republic of Law on Corporate Income Tax (available here (only in Lithuanian));
• expenses actually incurred by the foreign unit in connection with the management of its permanent establishment. These are expenses linked to decision making and overall activities of the foreign unit as a whole, rather than on specific activities through the permanent establishment, such as remuneration paid to board members;
• interest paid by the permanent establishment to its foreign unit (e.g. for a loan granted to the permanent establishment of the foreign unit).