Taxes in Lithuania in 2022
From 1.01.2022 minimum wage for full-time work is EUR 730 per month or EUR 4.47 per hour.
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:
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 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:
The standard corporate tax rate is 15%. However, if certain conditions are met, small companies and agricultural enterprises may apply for a reduced tax rate of 0 per cent or 5 per cent.
From the beginning of 2020 until the end of 2022, the taxable profits of credit institutions exceeding the threshold of 2 million euros are subject to an increased tax rate of 20%. Special rules apply for calculating this taxable profit.
Company in Lithuania UAB will be pleased to advise on tax-related issues in Lithuania and provide accounting services.
Due to its geographical location in the heart of Europe, Lithuania has access to a wide range of markets, including those in Western Europe, Scandinavia, and the Baltic States. With government funding, tax breaks, and easy registration procedures, it is a hotspot for startups. The business environment in Lithuania is very conducive to the development of your company.
Approximately 4.47 EUR per hour will be the minimum wage for full-time work starting on 1.01.2022.
The minimum wage earner’s tax-free income increases from 400 euros to 460 euros as of 01.01.2022. A change will also be made to the calculation of non-taxable income:
Employees have been paid in cash so far by employers. Bank transfers will be required for salaries, daily subsistence allowances, and reimbursements for work-related expenses starting in 2022.
Until an annual income of 90,246 euros is reached, the 20% rate applies. The rate of income tax is 32 percent if you earn more than €90,246 per year.
Lithuanian tax residents are taxed on their worldwide income.
Infringements of copyright must be compensated.
Most goods and services are subject to a standard rate of 21 percent.
Tax reductions of 9 percent are also applicable to public transportation, heating, and water for domestic use, household wood, and books and publications until 2022.
Pharmaceuticals, medical products, and periodicals are subject to even lower VAT rates of 5%.
It is standard for corporations to pay 15% tax. There are, however, certain conditions that must be met before a small company or agricultural enterprise can apply for a 0% or 5% tax rate reduction.
A 20% tax rate will be applied to taxable profits of credit institutions over 2 million euros beginning in 2020 and ending in 2022. For the calculation of this taxable profit, special rules apply.