Corporate income tax for banks will be raised to 20 percent

The corporate income tax rate for banks and credit unions is set to rise to 20 percent, from the current 15 percent, in January.

The higher rate will apply to a bank’s earnings exceeding 2 million euros.

Banks, like other legal entities in Lithuania, are now taxed at a 15 percent rate.

On Tuesday, the Seimas adopted the controversial draft amendment to the Law on Corporate Income Tax in a vote of 90 to 15 with 21 abstentions.

Gintare Skaiste, a member of the parliament' Committee on Budget and Finance, said the tax hike would not help boost competition in the banking sector, but "may even reduce it".

Liberal MP Simonas Gentvilas said he would turn to the Constitutional Court over the tax.

The amendment was tabled in place of an earlier proposal to impose a tax on bank assets.

Finance Minister Vilius Sapoka has said the corporate income tax hike to 20 percent would generate around 20 million euros in additional budget revenue.

The Lithuanian banking sector posted 334.5 million euros in non-consolidated net profits last year.