According to the Law on Corporate Income Tax and the Law on Personal Income Tax «Virtual currency» is a negotiable asset that can be used as a means of payment for goods and services. For VAT purposes, cryptocurrencies qualifying as contractual means of payment are treated as payment instruments. Tokens representing securities or rights to goods and services require a separate assessment.
Since the state currency of Lithuania is the euro, therefore all transactions in virtual currency in accounting are converted into euros and recorded in euros. Since the law does not regulate the exchange rate of the virtual currency against the euro, the source of the published virtual currency rate used in accounting should be recorded in the internal accounting rules. Given the fact that the exchange rate of a virtual currency can change significantly in a short period of time, an organization’s accounting policy must record not only the source but also the time of the transaction.
EXTRACTION AND SALE OF VIRTUAL CURRENCY
From the point of view of Lithuania’s corporate income tax, at the moment of production of the virtual currency tax does not arise.
A tax arises when a virtual currency is sold.
Taxable income is calculated by subtracting the value of production/acquisition of virtual currency from the sale price.
The price of production/acquisition may consist of all actual costs incurred, for example:
- Equipment
- Software development
- Depreciation of equipment and software
- Communication
- Electricity costs
- Costs of services purchased
- Labour costs
The documents supporting the costs on which the costs are based should contain all the required accounting particulars.
Mining (meening) and selling virtual currency is subject to VAT?
According to Court of Justice other European Union in case C-264/14 the sale of a virtual currency (exchange for a traditional FIAT currency ) is regarded as a sale of services for a fee. Although cryptocurrency exchange for consideration falls within the scope of VAT, exchange transactions involving cryptocurrencies qualifying as contractual means of payment are generally VAT exempt. Falling within the scope of VAT does not automatically mean that VAT must be charged. It should be noted that when virtual currency units are exchanged for Fiat or other virtual currencies, the taxable amount is equal to the margin, that is, the difference between the purchase/production price and the sale price.
PAYMENT FOR GOODS AND SERVICES IN VIRTUAL CURRENCY
On the tax side, there is no difference as to how the goods or services were paid (in cash, bank transfer or in virtual currency). Accounting for each transfer is mandatory. The transaction must be recorded both the payment of the purchased good or service and the purchase/sale of assets (virtual currency) at the rate of exchange at the time of the transaction.
An account for goods or services that are paid in virtual currency should not be different from an account when payment is made in traditional currency. The account must contain all required accounting details. Notwithstanding the currency in which the account will be paid, all amounts must be in euros, i.e. the virtual currency must be converted to euros at the market exchange rate prevailing at the time of accrual.
Salaries in virtual currency
According to Article 139(3) of the Labour Code of the Republic of Lithuania, the salary must be paid in money. Goods and services provided by employees are not considered part of the salary. Thus, all benefits paid to the employee in virtual currency are considered to be work-related income from which the employer must calculate, pay and declare income tax.
VIRTUAL CURRENCY TRANSACTIONS
A virtual currency can be bought in any way, both at a virtual exchange point and at other exchange venues.
From the point of view of the law, the difference between the sale price and the purchase price of a virtual currency is the income from the sale of a virtual currency. The acquisition price may include costs incurred in acquiring assets such as commissions and fees.
According to Article 79(1) of the Law on VAT, if a VAT payer sells a virtual currency through an exchange created in Lithuania through anonymous transactions, the VAT considers that the virtual currency has been sold to the exchange, and in that case the exchange must be listed as the buyer in the invoice. If the virtual currency is sold outside the territory of the country (for example, through an exchange established in another State), the sale of such currency in Lithuania is not confirmed by the account.
TAXATION OF TOKENS
A token is an instrument that gives its owner rights established by the issuer (e.g. right to share in profits, company income, interest on investments, right to receive certain goods or services, etc.). The VAT token is not considered as a virtual currency because it does not correspond to the definition of a virtual currency, i.e. the individual issuing it clearly defines the scope of the instrument, provides for certain obligations of the instrument, etc. etc.
However, it is worth noting that there are cases where tokens do not fit the above definition of token and are treated as virtual currency or coupons.
The issuance of tokens (considered as a security) is neither a supply of goods nor a service, so VAT is not subject to. Since according to Article 3 of the Law on VAT the supply of goods and/or services is carried out in Lithuania, VAT is subject to.
Jei tarpininkavimo paslaugos teikiamos dėl žetonų, laikomų vertybiniais popieriais, tokios tarpininkavimo paslaugos, teikiamos Lietuvoje pagal PVM įstatymo 28(5) straipsnio nuostatas, neapmokestinamos. Jei tarpininkavimo paslaugos teikiamos dėl žetonų, laikomų kuponais, tokios tarpininkavimo paslaugos, teikiamos Lietuvoje, apmokestinamos taikant standartinį PVM tarifą.
INCOME OF AN INDIVIDUAL
According to Republic of Lithuania Law on Personal Income Tax, virtual currency is considered property, so income from the sale of virtual currency is taxed in the same way as other income from the sale of assets. This means that taxable income is the difference between acquisition and sale.
The specialists of Company in Lithuania UAB will be happy to assist you with apskaitos paslaugos for your Lithuanian crypto company.
buhalterinės apskaitos paslaugas Lietuvoje
Basic Tax Rates in Lithuania
In Lithuania, taxes are levied on numerous activities and types of business sectors, however, many of them are general and therefore apply to every business operating in or from within Lithuania.
The tax year coincides with the calendar year and runs from the 1st of January until the 31st of December. However, a company can request a different tax period as long as it equals 12 calendar months.
Almost all of the taxes are collected and administered by the State Tax Inspectorate, only the State Social Insurance contributions are taken care of by the Board of the State Social Insurance Fund (aka SoDra).
Tax rates applicable in 2026 include: Corporate Income Tax – a standard rate of 17% on taxable profit; Personal Income Tax – generally progressive rates of 20%, 25% and 32%, with separate rules for certain income categories; Value Added Tax – a standard rate of 21%; employee social and health insurance contributions – generally 19.5%, plus 3% for participating pension savers; employer contributions – generally 1.77% for indefinite-term contracts or 2.49% for fixed-term contracts in the lowest occupational risk category. Withholding tax depends on the income category, recipient and applicable exemptions or tax treaty. Inheritance Tax – 5% or 10%, subject to statutory exemptions.
Corporate Income Tax
It’s definitely worth emphasising that the Lithuanian Corporate Income Tax is among the lowest in the EU, which makes Lithuania an attractive jurisdiction for businesses looking to optimise their tax payments. It’s generally paid by Lithuanian and foreign companies.
Depending on the tax residence status of a company, the Corporate Income Tax is levied either on income sourced in Lithuania and abroad or only on income sourced in Lithuania.
Resident companies are required to pay the Corporate Income Tax on all income, whether it’s sourced inside or outside of Lithuania. A company is treated as a tax resident of Lithuania if it’s incorporated in Lithuania under Lithuanian law.
Non-resident companies are required to pay the Corporate Income Tax in the following instances:
- When the income is sourced from economic activities performed through permanent establishments located in Lithuania
- When the income is sourced in foreign countries attributable to the economic activities performed by a foreign company through permanent establishments located in Lithuania
- When the income is sourced in Lithuania and received by a non-resident company in a way other than through permanent establishments located in Lithuania
Cryptocurrency companies should note that in the context of the Corporate Income Tax application, cryptocurrencies are considered short-term assets that can be used to pay for products and services or held for sale.
Another notable aspect is the varied application of the Corporate Income Tax. Not every crypto-related activity is taxed. Mining and security tokens do not benefit from a general corporate income tax exemption. Producing cryptocurrency does not itself create taxable income, but its subsequent sale or exchange may generate taxable profit. Funds raised through token issuance must be assessed according to the rights granted and the transaction’s substance; qualifying equity contributions are distinguished from taxable revenue.
If you’re keen to understand which crypto-related activities are taxable for your company, our team of legal experts is more than happy to consult you. We can help you navigate the maze of the Lithuanian tax system so that you can pay taxes with ease and focus on the development of your business instead.
When it comes to managing your company’s Corporate Income Tax contributions, you should pay attention to the most important deadlines and processes. Annual Corporate Income Tax returns are submitted within five months and 15 days after the end of a taxable period. Advance corporate income tax is generally payable in quarterly instalments. Newly registered taxpayers are exempt for their first tax period, and taxpayers whose taxable revenue in the preceding tax period did not exceed EUR 300,000 are also exempt. Other taxpayers calculate instalments using the statutory methods.
Corporate Income Tax Allowances
In addition to the favourable standard tax rate, Lithuanian taxpayers can avail of a number of deductions and allowances. One of the most relevant ones for crypto businesses is a reduced rate of 7% for tax periods beginning in 2026, applied only to the qualifying portion of profits from commercialising eligible R&D assets, calculated under the statutory formula and subject to all applicable conditions, i.e. commercial use of technological inventions.
For tax periods beginning in 2026, qualifying small companies may apply a 0% corporate income tax rate for their first two tax periods. Revenue must not exceed EUR 300,000 in each period, all participants must be natural persons, and the related-entity restrictions must be satisfied. During three consecutive tax periods, including the first two, the company must not suspend its activities, be liquidated or reorganised, or transfer its ownership interests to new participants. A 7% rate applies to qualifying small companies in subsequent periods, subject to the revenue threshold and related-entity restrictions. The former limit of 10 employees no longer applies.
When it comes to allowances linked to the tax residence status, a resident company will have an exception if the following conditions are met:
- Income is sourced from economic activities performed by a Lithuanian company through permanent establishments located in an EEA country or in a country with which Lithuania has signed an agreement on the elimination of double taxation
- Such income is subject to an equivalent tax in the respective country
Personal Income Tax
In Lithuania, if personal income is received through employment, the Personal Income Tax is then part of the salary structure, which means an employer is responsible for deducting the tax from the salary. In 2026, employment income is subject to progressive personal income tax rates: 20% on the relevant annual income portion up to EUR 83,237.40, 25% on the portion between EUR 83,237.40 and EUR 138,729, and 32% on the portion exceeding EUR 138,729. Other income included in the statutory annual aggregation may affect the applicable bracket. Any applicable tax-free allowance is assessed separately.
The employee’s residence status determines what income is taxable. Permanent residents of Lithuania are subject to paying Personal Income Tax contributions for all income received in Lithuania and abroad.
Non-permanent residents are only required to pay the Personal Income Tax for income sourced in Lithuania. This includes income sourced from employment relations, self-employment on a fixed base, distributions, and payments to the members of the management board and supervisory board and other.
To determine residence status, an individual should take the following conditions into consideration:
- He/she is present in Lithuania for at least 183 days during the tax period
- He/she is present in Lithuania for at least 280 days during two successive tax periods and he/she stays in Lithuania for at least 90 days in any of such tax periods
Value Added Tax
A Lithuanian business must register for VAT when consideration from VAT-taxable supplies taking place in Lithuania exceeds EUR 45,000 in the current or preceding calendar year. Registration may also be required below this threshold, including for certain services acquired from foreign suppliers, qualifying services supplied to businesses in other EU Member States, or intra-EU goods acquisitions exceeding EUR 14,000. On the other hand, not every crypto-related product or activity is subject to VAT.
For the purpose of VAT application, cryptocurrencies are considered a means of payment equally with legal tender in spite of the different opinions of the Bank of Lithuania.
Payments involving cryptocurrencies must be treated as financial transactions for VAT purposes so long as counterparties accept cryptocurrencies as a means of payment. Accordingly, cryptocurrencies may not be considered short-term assets when it comes to VAT.
VAT treatment depends on the particular transaction. Cryptocurrency exchange services involving contractual means of payment are generally VAT exempt. Mining without an identifiable customer and direct consideration is generally outside the scope of VAT. Token offerings may be outside the scope, exempt or taxable depending on the rights represented and the transaction’s substance. Services such as consultancy, promotion and certain custody or platform services do not automatically qualify for a financial services exemption.
Although the standard taxable period coincides with a calendar month, a company whose turnover from economic activities didn’t exceed 300,000 EUR during the previous calendar year can request the taxable period to coincide with a calendar quarter.
State Social Insurance
Whenever a cryptocurrency company employs people, it’s liable for paying the State Social Insurance contributions since they’re part of the salary structure. In 2026, the standard employer contribution rate for an indefinite-term employment contract is generally 1.77% of gross salary for employers in the lowest occupational risk category, including the applicable fund contributions. Higher occupational risk categories attract higher rates. The other part – 19.5% – is withheld from the employee’s salary. If a person is employed on the basis of a fixed-term contract, the employer’s contributions increase to 2.49%.
An employee must be registered at the Social Security Tax Office prior to the commencement of employment. This can be done by completing and submitting a 1-SD form, which is essentially a notification of the beginning of the State Social Insurance.
Payments of the State Social Insurance contributions along with appropriate reports are sent by the 15th of the following month, or by the next working day if the 15th is a weekend or a public holiday.
If you need further clarification to understand what taxes your cryptocurrency company should be paying in Lithuania and how to optimise them, our team here at Company in Lithuania UAB will be delighted to provide further guidance. Susisiekite su mumis today to receive a tailored consultation that will put you on the right track to growing your business.
