Legal Monitor Monitor 2005
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T. Ðevèenkos 21 LT-03111 Vilnius, Lithuania SALADÞIUS & PARTNERS Tel. (+370 5) 239 23 91 Law firm Fax (+370 5) 239 23 90 www.splegal.lt August LEGALLEGAL MONITOR MONITOR 2005 Legal Monitor is a publication of the Law Firm Saladžius & Partners where we provide the information on the latest Lithuanian and EU legislation, related to the legal entities' activities. In this issue we discuss the order of notifying about the posted workers, the newly adopted Law on Real Estate Tax, the ordained social tax, the amendments and supplements to the Law on Securities Market, amendments to the Law on Stock Companies also Rules on approval and drafting of the securities prospectus and disclosure of information, regulation implementing Council regulation on Community trade mark and present the announced acts of law. Order of the Minister of Social Security and Labour No A1 - 169 of 16 June 2005 on Confirmation of Order of Notification about Posted Workers (announced: State Gazette, 2005, No. 77 - 2801). 2. Tax on real estate LITHUANIAN AND EU LAW NEWS The Law on Real Estate Tax adopted on 7 June 2005 sets forth the order of taxation of real estate by real estate tax. According to this law, as from 1 January 2006, real estate situated in the territory of the 1. Order of notifying about the posted Republic of Lithuania and used for commercial purposes would be workers taxed by1%ofthereal estate fiscal value tax. As from the date of coming into force of this law, not only legal The Order of the Minister of Social Security and Labour on persons shall be obliged to pay the real estate tax for real estate Confirmation of Order of Notification about Posted Workers which pertaining by the ownership right, as yet, but also natural persons for came into force as of 22 June 2005 sets forth the order of real estate which they use for economical or individual activity. presentation of information about the posted workers and guarantees applied for them to the territory branches of the State Labour It is noteworthy, that legal persons shall assess, declare and pay the Inspection of the Republic of Lithuania. This order is approved in said tax not only for real estate pertaining by the ownership right but pursuance of the provisions of the Law on Guarantees for Posted also for the real estate (or its part) pertaining by ownership right to Workers of the Republic of Lithuania. natural persons, which was transferred to legal persons for termless or for a period longer than one month use (in other cases, natural The employer who sends the employee from any of the EU country persons shall assess, declare and pay the real estate tax by or other country for temporary work in the territory of the Republic themselves). of Lithuania for the period longer than 30 days or to work constructions works provided in the Law on Construction of the The tax would be assessed following the fiscal value indicated in the Republic of Lithuania, is obliged to present the notification to the records of the Register of Real Estate, which are going to be prepared territory branch of the State Labour Inspection of the Republic of by real estate assessor. In accordance with the general provision, the Lithuania, which shall be of a special form and in Lithuanian. In fiscal value of real estate is the average market value of real estate. case the employee is posted to several companies, every person The value of real estate may be also considered the fiscal value of (natural or legal) accepting the posted employee shall be indicated in real estate fixed after individual real estate evaluation. the notification. This notification shall be presented no later than 5 days to the beginning of work in the Republic of Lithuania. On Law on Real Estate Tax of the Republic of Lithuania No X - 33 of 7 extraordinary unscheduled events, the exemplary list of which is June 2005 (announced: State Gazette, 2005, No. 76 - 2741) presented in the order, the territory branch of the State Labour Inspection of the Republic of Lithuania shall be informed on the first workday of the posted worker in the Republic of Lithuania. 3. Social tax is being ordained In case the period between separate dispatches to the territory of the In accordance with the Law on Temporary Social Tax, enacted on 7 Republic of Lithuania is less than 30 days, the indicated 30 days June 2005, as from 1 January 2006, legal persons that have period is calculated by adding up all the periods of dispatches (the obligation to pay profit tax from the taxable profit are taxed by an rest period between the work in the territory of the Republic of additional temporary social tax. Lithuania is not reckoned in the dispatched period). This tax, which replaces contribution from income payable to the The employer has to present the revised notice immediately, if the road programme, shall be paid for the tax period starting in 2006 and dispatched period, the provisions set out in the order or other 2007. When assessing the tax for the taxable period starting in 2006, conditions of the dispatched are changed. In case the dispatch was tax rate of 4 % shall apply, and for the taxable period starting in 2007 withdrawn, the employer has to inform the territory branch of the - the tax rate of 3 % shall apply. The base of this tax is taxable profit State Labour Inspection of the Republic of Lithuania where the assessed following the order indicated in the Law on Profit Tax. posted worker performs his functions. 1 T. Ðevèenkos 21 SALADÞIUS & PARTNERS LT-03111 Vilnius, Lithuania Tel. (+370 5) 239 23 91 Law firm Fax (+370 5) 239 23 90 www.splegal.lt August LEGALLEGAL MONITOR MONITOR 2005 It should be noted, that the social tax shall be calculated and paid in advance, save some exceptions laid down in the law (e.g., the newly 5. Amendments to the Law on Stock registered legal persons would not be obliged to pay an advanced tax Companies during the first taxable period). On 23 June 2005, amendments to some provisions of the Law on Law on Temporary Social Tax of the Republic of Lithuania No X - Stock Companies were adopted, by which the Law on Stock 231 of 7 June 2005 (announced: State Gazette, 2005, No. 76 - 2739). Companies was harmonized with the Law on Amendments and Supplements to the Law on Securities Market, enacted at the same 4. The amendments and supplements to time. the Law on Securities Market came into It is noteworthy, that, as of now, the date and number of a public force stock company securities' prospectus shall be indicated in the agreement for the subscription of shares in case the prospectus shall According to the latest amendments to the Law on Securities Market be confirmed following the order indicated in legal acts regulating (effective from 12 July 2005), the shareholder (acting personally or securities' market, instead of registration date and number of a public together with other persons) of any accountable issuer incorporated stock company's shares, in case the shares were registered in the in Lithuania who holds the shares which grant him no less than 95% Securities' Commission. of all votes at a general meeting of shareholders of that issuer shall be entitled to request that all the remaining shareholders of the issuer Law on Amendments to the Articles 13, 44, 46, 48, 55, 72 and 74 of sell to him the shares conferring voting rights held by them and the Law on Stock Companies of the Republic of Lithuania No. X - 271 minority shareholders shall be obliged to sell such shares following of 23 June 2005 (Announced: State Gazette, 2005, No. 84 - 3109). the order stipulated in the Law (squeeze-out right). Previously (until entry into force of the last amendments of the Law) the above- 6. Rules on approval and drafting of the mentioned provision was applicable only to the shareholders of the accountable issuers which shares were included into the official or securities prospectus and disclosure of current lists of a stock exchange. information adopted The amendments to the Law also established a right of the minority shareholders to demand from the shareholders, who hold no less The Securities Commission of the Republic of Lithuania approved than 95% of all votes at a general meeting of shareholders of that the Rules on Approval and Drafting of the Securities Prospectus and issuer, to buy their shares (sell-out right). Disclosure of Information on 15 July 2005. These rules were adopted in accordance with the above-mentioned amendments and Among the other amendments and supplements to the Law, the Law supplements to the Law on Securities Market related to the approval provides for cases and order of the publication of the issuer's and publication of the prospectus. prospectus. The prospectus is a document for the investors and public presenting the basic information about the issuer and its According to these rules, the approval of the securities prospectus securities, which are publicly offered or included in the trade of the will be carried instead of the registration of securities. The rules regulated market. It is noteworthy, that the newly established provide for requirements for the information presented in the procedure of the approval of the prospectus carried out by the prospectus, structure of the prospectus, peculiarities of the validity Securities Commission of the Republic of Lithuania or the of the prospectus, as well as the exceptions to the obligation to competent institution of another Member State of the European publish the prospectus (e.g., when the shares, that will be publicly Union replaced the securities registration.