Accounting services in Lithuania
From 1.01.2022 minimum wage for full-time work is EUR 730 per month or EUR 4.47 per hour.
Tax-deductible income accounting
From 01.01.2022 the tax-free income is increased from 400 euros to 460 euros for those who receive the minimum wage. The calculation of the non-taxable income will also be changed:
- If the gross salary is less than or equal to the minimum wage – 730 euros, a fixed monthly indemnity of 460 euros is used;
- If the gross salary is between 730 euros and, 1678 euros, the formula should be as follows: Monthly non-taxable income = 460-0.26 x (monthly wage – minimum monthly wage).
- If the gross wage exceeds 1,678 euros, the following formula is applied: Monthly non-taxable income = 400-0.18 (monthly wage – 642).
- For wages above 2,864 euros, the non-taxable minimum is not applicable.
So far, employers have been able to pay their employees in cash. As of 2022, the salary, daily subsistence allowance and reimbursement of work-related expenses will have to be paid by bank transfer.
The 20% rate is applied if the annual income is up to 90,246 euros. If income exceeds €90,246, the income tax rate is 32 per cent.
Income received by a tax resident of Lithuania worldwide is subject to income tax.
- The following income is taxed for non-residents of Lithuania:
- Income from work in the territory of Lithuania
- Income from Distributed Profits and Payments to Board Members
- Interest income (excluding interest on securities of the Government of Lithuania)
- Income of athletes and artists
- Royalties including copyrights
- Income from the rental of real estate located in Lithuania.
- Income from the sale or transfer of movable property if the object is legally registered in according to local law and such an object is registered (or must be registered) in Lithuania, as well as income from the sale of immovable property located in Lithuania.
- Income derived from an individual activity, carried out through a permanent base, as well as income, received abroad, which belongs to this permanent base in Lithuania, if the said income is connected with the activity of a non-resident through a permanent base in Lithuania.
- Compensation for copyright infringement.
Value added tax
The standard rate of 21 per cent applies to most goods and services.
There is also a reduced VAT rate of 9 per cent, which applies to public transport, heating, and water for domestic use, household and hotel wood, and books and publications, which is valid until the end of 2022.
An even lower VAT rate of 5% applies to the sale and repair of equipment for the disabled, pharmaceuticals, medical products and periodicals.
However, there are certain goods and services in Lithuania that are not subject to VAT: