Taxation of Private Person’s Crypto Earnings in Lithuania

Taxation of Private Person’s Crypto Earnings in LithuaniaCryptocurrencies are becoming more and more popular not only as a way to invest, but also as a strategy for generating short-term financial gains, too. In Lithuania, there are two main ways to handle cryptocurrency exchanges: by doing it on a less regular basis without any registration, or by registering as self-employed and trading on a regular basis.

Crypto gains include only closed crypto sales, and not the current holdings of an individual.


Crypto tax for occasional traders

For taxpayers who do not indicate cryptocurrency trading as a work activity, cryptocurrency gains are treated as additional income from the sale of personal assets. In addition to cryptocurrency, personal assets also include electronics, household items, art objects etc. The non-taxable limit for private persons’ asset sales is 2500 euros, and any surplus income is subject to a tax rate of 15%.

The increased tax rate of 20% applies in cases when all non-work-related income (including dividend income, interest income and capital gains) is more than 120 times greater than the average salary for that taxation period (1352,7 euros in 2021).

Crypto tax for registered self-employed individuals

Private persons have to register as self-employed cryptocurrency traders if their trading activity:

  • Takes place over an extended amount of time
  • Is intended to bring a regular income or other economic benefits
  • Is carried out independently

Income tax rate for registered independent traders varies from 5% to 15%. However, registered persons are also subject to other taxes, such as health insurance and social security contributions.

Income administration and deadlines

A report on crypto-related income is to be submitted as part of the annual income declaration. Submission deadline for annual income declaration in Lithuania is on the 1st of May (2nd of May for income received in 2021, since May 1st is a public holiday).

If crypto-related income is received through a bank registered in Lithuania, the bank will be obliged to report this income to government institutions. This is in accordance with the Lithuanian law and goes to ensure that individuals declare their income correctly.

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