Management Theory and Studies for Rural Business and Infrastructure Development, Volume 22

Agricultural holdings for tax purposes of grouping alternatives

Danutė Juškevičienė, Artūras Lakis


From the beginning of 2009 population engaged in the agricultural activity by the purposes
of the state social insurance and health insurance contributions, as well as the personal income
tax are grouped under their controlled holding economic size, measured in European Size Units
(ESU). In the current national tax system, holding size has influence on the situation of the
owner (owners) in the special grouping schemes of the population engaged in the agricultural activity
and is directly related to the payable tax amount and payment terms. For the owners of
smaller holdings, the taxing terms are more favorable. For the tax purposes the same holdings
economic size groups’ limitary values are used. However, every individual tax system has different
schemes of the groups. Under the current legislation, for agricultural income in Lithuania is
classified income from the services to agriculture, listed in the special order of the Minister of
Agriculture, and fishery income. Therefore, income from the services to agriculture and fisheries
income are included in to the overall holding size calculations. The paper presents the grouping
of agricultural holdings for tax purposes in alternative systems, formed by using different economic
and quantitative indicators, research results, evaluated the potential consequences of the
changes in grouping system, and partial mitigation proposals of the negative consequences.

Keyword(s): European Size Unit, tax, standard gross margin, standard output, standard income, economic holding size

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Management Theory and Studies for Rural Business and Infrastructure Development eISSN 2345-0355

This journal is published under the terms of the Creative Commons Attribution-Noncommercial 3.0 Unported License. Responsible editor: Dr Audrius Gargasas.