EC warns Lithuania over delays in transposing Pillar Two directive into national law

Lithuania has received a letter of formal notice from the European Commission over delays in transposing the Pillar Two directive, which imposes a minimum effective corporate income tax rate on multinational companies, the Verslo žinios business news website reports.

The directive entered into force on 1 January 2024. It introduced a minimum rate of effective taxation of 15% for multinational companies active in EU member states.

The necessary draft law is set to be debated in the Seimas’ spring session, the Finance Ministry said.

The EU Commission has sent letters of formal notice to those countries which have failed to notify national measures transposing directives, whose transposition deadline expired recently.

“This important Directive brings greater fairness and stability to the tax landscape in the EU and globally by limiting the race to the bottom in corporate tax rates and lowering the incentive for businesses to shift profits to low-tax jurisdictions. 9 Member States – Estonia, Greece, Spain, Cyprus, Latvia, Lithuania, Malta, Poland and Portugal – have not communicated national measures transposing the Directive by the deadline of 31 December 2023,” the institution said in a press release.