Tax in Lithuania - Qatar Double Taxation Avoidance Treaty: Draft Provisions

The Lithuanian Finance Ministry proposed to commence negotiations for the avoidance of double taxation and prevention of fiscal evasion treaty between Lithuania and Qatar. The draft government resolution was drawn up by the Lithuanian Finance Ministry. The treaty should help to prevent tax evasion and encourage Qatar companies to start business in Lithuania.

According to the draft of the aforementioned treaty, income derived by a resident of a one state from immovable property (including income from agriculture or forestry) situated in the other state may be taxed in that other state.

As for business profits, business profits of an enterprise of one state shall be taxable only in that state unless the enterprise carries on business in the other state through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the business profits of the enterprise may be taxed in the other state, but only so much of them as is attributable to that permanent establishment.

Dividends paid by a resident of a one state and beneficially owned by a resident of the other state may be taxed in that other state. However, such dividends may also be taxed in the state of which the payer is a resident and according to the laws of that state, but if the beneficial owner of the dividends is a resident of the other state, the tax so charged shall not exceed particular percentage, the value whereof shall be determined after negotiations between Lithuania and Qatar.

Interests and royalties arising in one state and beneficially owned by a resident of the other state may be taxed in that other state. However, such royalties may also be taxed in the state in which they arise and according to the laws of that state, but tax so charged shall not exceed 10 %.

For the Treaty to come into force both states have to fulfill the established procedures.