| Abstract [eng] |
Capital income taxation in Lithuania: development of legal regulation and problems This thesis presents a comprehensive analysis of capital income taxation in Lithuania, its development and main regulatory problems. The first part of the thesis reveals the concept of capital income. It is argued that capital income taxes can be dealt with in two prisms – broad and narrow. The author considers the narrow prism to be more suitable, by which capital income is related to passive income and it thus includes income from the sale or lease of real estate, dividends, interest, fee (honorarium), capital gains and other income from passive activities of individual or legal person. Although as a general rule capital income in Lithuania is taxed at 15 percent corporation tax or personal income tax, however, both taxes are applied subject to a number tax benefits and advantages. The second part of the thesis analyses the development of taxation of capital income in Lithuania, mainly focusing on national laws on Corporate Tax and Income Tax. It is concluded in this part that the trends of capital income taxation are two-fold. Whereas the corporate tax has become increasingly attractive with less tax levied on capital income, the personal income taxation has been tightening since 2015. The third part of the work focuses on the key problems of capital income taxation. It is established that at present, capital income in Lithuania is taxed more favourably and is the subject to more tax advantages in comparison with labour income, which in turn can create a higher tax burden for those receiving labour income. It is argued, however, that an increase of the taxation of capital income is not an appropriate solution to this problem, since it would have an even more negative effect on labour income, as well as on national economy and on the attraction of foreign investments. |
