Lithuania Tax Agency Issues Letter Clarifying Income Tax Treatment of Additional Employer-Paid Voluntary Health Insurance

The Lithuanian State Tax Inspectorate April 16 issued Letter No. R-1055, clarifying the income tax treatment of additional employer-paid voluntary health insurance. The letter clarifies that: 1) the benefit in kind of additional employer-paid voluntary health insurance is taxable income to the employee upon acquisition of the insurance service; 2) the employer can deduct from taxable profits the expenses incurred in purchasing the insurance, if necessary to earn income; 3) the benefit to the employee includes the insurance price, including the social insurance component, and may qualify for an exemption of up to 350 euros (US$412), if for health care; ...