Permanent establishments: evaluation and related services

As the world becomes more global, companies often operate in several countries, so it is very important to assess whether such activities do not create tax obligations in other countries. A foreign entity that has started a business in Lithuania must assess the tax consequences related to such activities in both jurisdictions.

The status of permanent establishment defines where the internationally operating business has to pay the corporate tax. Permanent establishment, in general, means a fixed place of business through which the business of an enterprise is wholly or partly carried on. However, it may not be easy to determine permanent establishment in each particular case as it has to meet criteria set on national and international level.

Besides, in case of the existence of a permanent establishment, the accounts between the main office of the company and its permanent establishment should be settled on the same terms and conditions that would be agreed between independent entities. Such fictitious independence of the permanent establishment requires a proper allocation of costs as well as a proper calculation of the income attributable to the permanent establishment. Therefore, our advisors at Rödl & Partner Lithuania are here for your convenience.

Our experts at Rödl & Partner in Lithuania are well prepared to assist the clients on all permanent establishment related issues, e.g.:

• Evaluate, manage or minimize your permanent establishment risks
• Assist in allocation of costs and find the proper method for calculation of income of permanent establishment
• Dealing with tax authorities in Lithuania: obtaining their written opinions or binding rulings on permanent establishment risks evaluation results, chosen methods for attribution of income and allocable costs, assistance in discussions with the tax authority during permanent establishment related tax audits and investigations.

We are ready to review and model your existing operations as well as advise you on the latest/new projects in Lithuania. In addition, together with an international team of Rödl & Partner advisors, we are eager to assist you in the development of your business across the region.