| Abstract [eng] |
Lithuania during several recent years has lost its leading position in Western Europe compared to calculation of taxable profit rules and income tax rate, but it is still one of leading countries, it keep up with Latvia and Estonia where also are developed one of the most attractive income tax systems in the European Union. In order to evaluate country’s attractiveness to foreign investors we need to evaluate calculation of taxable profit rules and review corporate income tax rate. The subject of this investigation is taxable profit. Purpose is to find out calculation of taxable profit rules. There are main tasks to achieve the purpose: 1) to investigate concept of profit and to give information about profit management; 2) to analyze calculation of taxable profit of Lithuanian stock companies; 3) to consider and compare Lithuanian, Latvian and Estonian calculation of taxable profit. This paper consists of three main parts. In the first part “Concept of profit and management”, is considered the profit concept, differences between taxable and accounting profit, also there is written about profit management opportunities choosing of accounting policy tools. In the second part “Calculation of taxable profit in Lithuania” is analyzed stock companies calculation of taxable profit and is introduced non-taxable income, not allowed and limited amount allowed deductions. Also there is written possibilities of reducing income tax and about profit tax declaration as well its purpose. The third part “Calculation of taxable profit comparative analysis” is dedicated to compare Lithuanian, Latvian and Estonian calculation of taxable profit rules. Furthermore there is given Lithuanian corporate income tax law improvement. The analysis of this topic has received these important findings. Tax and accounting systems exist for different reasons. So, the accounting and taxable profit will differ mainly because company may be permitted or required under the tax law, to use different accounting methods than those used under the VAS/IFRS. Lithuanian company taxable profit is calculated in accordance to the provisions of income tax law and other legislation. Income is deducted by non-taxable income, allowed deductions and limited amount allowed deductions. Latvia’s corporate taxable profit is calculated like this: profit (loss) before taxation is adjusted by expenses not related to business and by not allowed deductions. Estonian income tax system differs from traditional Lithuanian and Latvian systems that profit is not subject to tax at the time when earned. Income tax is calculated when it is distributed in dividends or any other form. As well as income tax is calculated on the gifts, donations and entertainment expenses and expenses that are not related to business. |
