[World Tax News] Lithuania Tax Hike Proposal | Russia–UAE Update | Mauritius TASS 2025

Editorial Team – [2025] 180 taxmann.com 649 (Article)

World Tax News provides a weekly snippet of tax news from around the globe. Here is a glimpse of the tax happening in the world this week:

1. Lithuania proposes higher additional tax on banks and credit institutions

The Lithuanian parliament (Seimas) is reviewing a draft bill that would raise the additional tax on banks and credit institutions from 5% to 10%. Introduced in 2020 and later made permanent, the existing 5% levy applies on top of the standard corporate income tax rate and is subject to restricted deductions. Notably, certain deductions, such as enhanced R&D deductions, film production incentives, deductible donations, and carried-forward losses, are excluded from the computation of this additional tax.

The proposed increase aligns with the expiry of the temporary solidarity contributions imposed on banks, which end on 31 December 2025. If enacted, the higher 10% rate would take effect from 1 March 2026.

Source – Draft Bill

2. Russia proposes removing the UAE from its special offshore jurisdictions list for 2024–2026

Russia has issued a draft order from the Ministry of Finance proposing amendments to Order No. 35n dated 28 March 2024. Order No. 35n previously approved a special list of states and territories regarded as offering preferential tax regimes and/or lacking requirements for the disclosure and provision of financial transaction information (offshore zones).

This list was established under Law No. 595-FZ of 19 December 2023 and is applicable for the 2024–2026 tax periods for the purposes of:

• CFC Profit Exemptions – Application of the profit exemption for controlled foreign companies (CFCs) under Article 25.13-1 of the Tax Code, which applies to CFCs located in tax treaty jurisdictions unless they appear on the offshore zones list, as well as the profit adjustment rules for CFCs under Article 25.15.
• Excluded Income Rules – Determining income excluded from the tax base under Article 251 of the Tax Code, covering situations where a Russian organisation receives property or property rights free of charge, provided certain conditions are met — including that the transferor is not a foreign entity located in a listed offshore jurisdiction.
• 0% Dividend Tax Rate – Application of the 0% dividend tax rate under Article 284, which is available when the recipient holds at least 50% of the distributing entity for a minimum of 365 days, including where dividends are paid by a foreign company, except where that company is situated in an offshore jurisdiction on the special list.

The draft order proposes to remove the United Arab Emirates from the special list effective 1 January 2026. This timeline aligns with the entry into force of the new Russia–UAE income and capital tax treaty, which was signed on 17 February 2025 and became effective on 18 July 2025.

Source – Draft Order

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