{"id":36143,"date":"2023-10-30T08:40:20","date_gmt":"2023-10-30T06:40:20","guid":{"rendered":"https:\/\/tet.lt\/?p=36143"},"modified":"2026-10-09T15:54:21","modified_gmt":"2026-10-09T12:54:21","slug":"taxes-in-lithuania","status":"publish","type":"post","link":"https:\/\/tet.lt\/lt\/blog\/taxes-in-lithuania\/","title":{"rendered":"Mokes\u010diai Lietuvoje 2025 m."},"content":{"rendered":"<section class=\"l-section wpb_row height_custom\"><div class=\"l-section-h i-cf\"><div class=\"g-cols via_flex valign_top type_default\"><div class=\"vc_col-sm-12 wpb_column vc_column_container\"><div class=\"vc_column-inner\"><div class=\"wpb_wrapper\"><div class=\"wpb_text_column\"><div class=\"wpb_wrapper\"><h1>Mokes\u010diai Lietuvoje 2025 m.<\/h1>\n<p>On 1 January 2025, amendments to the <strong>Income Tax Law<\/strong> will <strong>come<\/strong> into force in Lithuania, which will affect the operations of many companies in Lithuania. <strong>These amendments not only change the corporate tax rates, but also establish new requirements for the acquisition cost of passenger cars and their attribution to allowable deductions.<\/strong><\/p>\n<h2>Major changes from 2025<\/h2>\n<p><strong>Changes in corporate tax rates<\/strong><\/p>\n<ul>\n<li>Lithuania increased its standard Corporate Income Tax rate from 15% to 16% for tax periods beginning in 2025. From 1 January 2026, the standard rate increased further to 17%. The applicable rate depends on the tax period for which the company&#8217;s taxable profits are calculated.<\/li>\n<li>Lithuania increased the reduced Corporate Income Tax rate for qualifying small companies from 5% to 6% for the 2025 tax period. From 1 January 2026, the reduced rate increased to 7%. Eligible newly established small companies may also qualify for a 0% Corporate Income Tax rate during their first two tax periods under the rules applicable from 2026, subject to statutory conditions.<\/li>\n<li>Eligible small companies will be able to use <strong>0% for the first year after the start of their operations. corporate tax rate<\/strong>.<\/li>\n<\/ul>\n<h3>Limitations on the cost of acquiring cars<\/h3>\n<p>From 2025 1 January New <strong>limits on <\/strong>the<strong> attribution of car purchase costs to <\/strong>allowable deductions will come into force on 1 January , which will depend on the car&#8217;s <strong>CO2 emissions <\/strong>and purchase price.<\/p>\n<ul>\n<li><strong>Cars with higher CO2 emissions <\/strong>will have stricter deduction limits.<\/li>\n<li>These restrictions <strong>do not apply <\/strong>to rental, driver training and transport services activities.<\/li>\n<\/ul>\n<p>The portion of the purchase price not exceeding the limits will be considered an allowable deduction and the portion exceeding it is not deductible.<\/p>\n<h2>Amendments to the Income Tax Law<\/h2>\n<p>The Seimas of the Republic of Lithuania adopted amendments to the Law on Income Tax, which will enter into force from <strong>2025. 1 January <\/strong>and will be applied to the calculation and declaration of corporate tax for 2025 and subsequent tax periods.<\/p>\n<p><strong>Commencement of application of the new provision<\/strong><\/p>\n<p>From 2025, new provisions relating to corporation tax rates and the deduction of expenses for the purchase and lease of passenger cars will come into force on 1 January. These provisions will apply to the calculation and the 2025 return. and income tax for subsequent tax periods.<\/p>\n<p><strong>Business requirements and preparation for change<\/strong><\/p>\n<p>The corporate income tax rate in Lithuania remains one of the lowest in the EU, but in 2025 The changes may affect companies&#8217; tax accounting and financial performance. Businesses need to carefully assess how these changes will affect their corporate tax calculations, especially in light of the restrictions on car purchases.<\/p>\n<p><strong>Limited deductions are allowed<\/strong><\/p>\n<p>From 2025 1 January New restrictions will apply to the deduction of car purchase and rental costs from taxable income. These limits will depend on the vehicle&#8217;s carbon dioxide (CO2) emissions and will only apply to newly purchased passenger cars (category M1).<\/p>\n<p><strong>Even electric cars will be limited in the allowable deductions for depreciation and rental expenses. <\/strong>However, these limitations will not apply to vehicles that are used only for hire, driver training or transport services.<\/p>\n<p>These restrictions will be in effect from 2025. 1 January and will remain in force until amended or repealed. They will apply to all companies purchasing or leasing passenger cars, regardless of their size or area of activity.<\/p>\n<p>These changes are aimed at encouraging companies to choose less polluting vehicles to contribute to the overall goal of reducing pollution in the transport sector.<\/p>\n<h2>Regulation of value added tax by EU directives<\/h2>\n<p>The EU VAT in the Digital Age (ViDA) legislative package was formally adopted on 11 March 2025. The reform introduces changes to digital VAT reporting, electronic invoicing, platform economy taxation and the Single VAT Registration framework. Implementation will take place gradually, with certain provisions applying from 2027, platform economy and single registration measures from 2028, and mandatory digital reporting for qualifying cross-border B2B transactions from 1 July 2030. For example, the ViDA proposal aims to provide greater opportunities for companies trading across borders in the EU to report their transactions through a single VAT registration and to apply reverse taxation for business-to-business transactions.<\/p>\n<p>However, as the aforementioned draft directive is still under discussion, let us consider another addition to the VAT directive for &#8220;small entrepreneurs&#8221;, which will change the rules for calculating VAT in Lithuania. This is relevant when charging VAT for the supply of goods and services. In addition, a European Council directive will come into force in 2025, which will set the maximum VAT registration threshold at 85,000 euros.<\/p>\n<h2>VAT rules and rates<\/h2>\n<h3>When does VAT apply and when do I need to register as a VAT payer?<\/h3>\n<p>Value Added Tax (VAT) generally applies to taxable supplies of goods and services, intra-Community acquisitions and imports within the European Union, subject to the applicable place-of-supply rules, exemptions and special schemes. Businesses registered as ordinary VAT payers must generally charge VAT on taxable domestic supplies unless an exemption, zero rate or reverse-charge mechanism applies. Small businesses qualifying for the Lithuanian Small Business VAT Scheme may make eligible domestic supplies without charging VAT, provided that the statutory conditions are satisfied.<\/p>\n<h3>National VAT rules<\/h3>\n<p>VAT rules may be applied differently in each EU country. Therefore, it is important to learn more about the legislation of the country in which your company operates. The Law of the Republic of Lithuania on Value Added Tax (Zin., 2002, No. 35-1271, 04.05.2002) sets out the VAT rules in Lithuania. This law regulates the procedure for calculating, paying and declaring VAT in Lithuania, ensuring that businesses comply with the national VAT rules. From 1 May 2025, Lithuania introduced revised VAT registration rules while maintaining the domestic mandatory VAT registration threshold at EUR 45,000. The proposed increase to EUR 55,000 was not implemented. The threshold is now assessed based on taxable turnover during the current or preceding calendar year, rather than a rolling 12-month period. Additional VAT registration obligations may arise from intra-EU acquisitions and cross-border services, regardless of whether the domestic turnover threshold has been exceeded.<\/p>\n<h2>in 2024, the applicable VAT calculation rule<\/h2>\n<p>From 1 May 2025, a taxable person must generally register for VAT in Lithuania when the value of taxable goods and services supplied within Lithuania exceeds EUR 45,000 during the preceding or current calendar year. The previous rolling 12-month calculation no longer applies. VAT registration may also be required below this threshold for certain intra-EU acquisitions, cross-border services and other transactions specified by Lithuanian legislation. The Ministry of Finance is also considering a proposal to increase the VAT payer limit to 55,000 euros, which would allow small businesses to avoid registering as VAT payers as long as their <a href=\"https:\/\/saskaita123.lt\/lt\/blog\/kaip-apmokestinamos-pajamos\/\" target=\"_blank\" rel=\"noopener\">income<\/a> does not exceed this limit.<\/p>\n<p>Thus, a taxpayer of the Republic of Lithuania is not obliged to submit an application for registration as a VAT payer, calculate VAT on goods supplied (except for new vehicles supplied to other Member States) and\/or services rendered and pay it to the budget if the total amount of remuneration for performing economic activities in the territory of the country, the amount of goods supplied and\/or services rendered for the year (last 12 months) did not exceed EUR 45,000.<\/p>\n<p>Therefore, VAT should be calculated from the month in which the specified limit is exceeded. VAT is not chargeable on goods and services supplied for which remuneration has not exceeded the specified amount of \u20ac45,000.<\/p>\n<p>The standard VAT rate in Lithuania remains 21% in 2026. From 1 January 2026, the former reduced VAT rate of 9% was replaced by a reduced rate of 12% for qualifying goods and services. A reduced rate of 5% and a zero rate of 0% also apply to specified transactions, subject to the relevant statutory conditions.<\/p>\n<h2>VAT threshold changes from 2025 to 55 thousand euros<\/h2>\n<p>From 1 May 2025, Lithuania changed the method used to determine the mandatory VAT registration threshold. The threshold remains EUR 45,000, but taxable turnover is assessed during the preceding or current calendar year rather than the previous 12 consecutive months. Businesses exceeding EUR 45,000 in qualifying domestic taxable turnover must generally register for VAT under the applicable rules. Instead, the basic principle is that the amount is assessed during the previous calendar year and calculated in the current year. This means that a taxable person in the Republic of Lithuania may apply the so-called &#8220;Lithuanian small business scheme&#8221;. It means that a taxpayer in Lithuania is not obliged to register as a VAT payer and to calculate and pay VAT on supplied goods (except for new vehicles supplied to other Member States) and\/or services according to the procedure established by the Law. of the VAT Act, if the total remuneration for the performance of economic activities in the country, the amount of goods and\/or services provided in the territory <strong>during the previous calendar year did not exceed EUR 55,000 and is not expected to exceed this limit in the current year. year calendar year. year. <\/strong>Thus, the provision that the calculation is made for the last 12 months no longer exists. This change is significant as the country&#8217;s small businesses seek to reduce their tax burden.<\/p>\n<p>Of course, this provision applies to newly established taxpayers of the Republic of Lithuania if this limit is not expected to be exceeded in the current calendar year. Thus, in case of establishing a new company, the mandatory VAT registration threshold of EUR 55,000 will be calculated for the current calendar year.<\/p>\n<p>Under the new limits, VAT will have to be calculated from the month in which the limit is exceeded. VAT is not chargeable on goods and services supplied for which the remuneration did not exceed the specified amount of \u20ac55,000.<\/p>\n<p>Under the VAT rules applicable from 1 May 2025, a Lithuanian small business, including a Small Partnership (MB), must assess whether its domestic taxable turnover exceeded EUR 45,000 during the current or preceding calendar year. Where the threshold is exceeded, the business generally becomes liable for ordinary VAT registration and taxation. Businesses remaining below the threshold may qualify for the Lithuanian Small Business VAT Scheme (SVS), subject to the applicable conditions and separate obligations arising from cross-border transactions.<\/p>\n<h2>VAT rates and payment in Lithuania 2025<\/h2>\n<p>VAT rates depend on the product or service of the transaction. Different VAT rates are applied in EU countries. The following VAT rates apply in Lithuania from 1 January 2026:<\/p>\n<ul>\n<li>standard VAT rate &#8211; 21%<\/li>\n<li>reduced VAT rate &#8211; 12%<\/li>\n<li>reduced VAT rate &#8211; 5%<\/li>\n<li>zero VAT rate &#8211; 0%<\/li>\n<\/ul>\n<p>The applicable rate depends on the type of goods or services and the relevant provisions of Lithuanian VAT legislation. The former reduced rate of 9% ceased to apply as the general reduced VAT rate from 1 January 2026.<\/p>\n<p>VAT rates may vary depending on the type of goods or services. For example, reduced rates may apply to certain goods or services, such as medical goods or educational services. This allows businesses and consumers to take advantage of lower taxes in certain areas, incentivising the consumption of certain goods and services.<\/p>\n<h3>Application of VAT to the supply and purchase of goods from other Member States<\/h3>\n<p>Application of VAT on the exchange and purchase of goods from other Member States.<\/p>\n<p>From 1 January 2025, eligible small businesses established in Lithuania may apply the EU cross-border Small Enterprise Scheme in other participating Member States, provided that their total annual EU turnover does not exceed EUR 100,000 and they remain below the applicable national exemption threshold in each Member State concerned. The business must complete the required prior notification procedure and obtain an identification number with an EX suffix. The exemption is not automatic and does not apply universally to all cross-border supplies. Businesses must also consider distance selling rules, the VAT One Stop Shop (OSS) and other relevant VAT obligations. From 2025, qualifying Lithuanian small businesses may apply the EU cross-border Small Enterprise Scheme in eligible Member States, subject to the EUR 100,000 annual EU-wide turnover ceiling and the national exemption threshold of the relevant Member State. The Lithuanian domestic VAT registration threshold remains EUR 45,000. Exceeding the applicable threshold or failing to satisfy the scheme&#8217;s requirements may result in VAT registration and payment obligations.<\/p>\n<p>Thus, a taxpayer in Lithuania and a taxpayer established in another EU Member State who have registered or are required to register as a VAT payer under the VAT Law for the purpose of purchasing goods in other EU Member States or services from other EU Member States. and\/or providing services in other Member States may apply the Lithuanian small business scheme.<\/p>\n<h3>What are the conditions for applying the Lithuanian small business scheme for a taxpayer registered in another EU Member State?<\/h3>\n<ul>\n<li>From 1 January 2025, a taxable person established in another EU Member State may qualify for the Lithuanian cross-border Small Business VAT Scheme if its total EU-wide annual turnover does not exceed EUR 100,000 and its qualifying turnover in Lithuania remains within the domestic EUR 45,000 threshold during the relevant calendar years. The business must complete the required notification procedure through the tax authority of its Member State of establishment and obtain the appropriate EX identification number. Other VAT obligations may still arise depending on the nature of its transactions. VAT is not charged for supplied goods and services for which remuneration has not exceeded the limit of EUR 55,000 if the following conditions are met:<\/li>\n<\/ul>\n<p>1) the total remuneration of that taxpayer for goods and\/or services rendered in the course of economic activity in the territory during the previous calendar year did not exceed \u20ac55,000 and is not expected to exceed this limit in the current calendar year (for newly established taxpayers registered in another Member State, this provision applies if it is not expected to exceed this limit in the current calendar year) and<\/p>\n<p>2) the total remuneration of that taxpayer for goods and\/or services provided in the course of business activities in the European Union during the previous calendar year did not exceed \u20ac100,000, recalculated by applying the 2018 European Central System. Bank. 18 January published exchange rates, and is not expected to exceed this limit in the current calendar year (for newly established taxpayers registered in another Member State, this provision applies if it is not expected to exceed this limit in the current calendar year), and<\/p>\n<p>3) this taxpayer has a VAT payer identification number assigned by the Member State of establishment with the symbol &#8220;EX&#8221; at the end of this number, which entitles it to apply the small business scheme in Lithuania.<\/p>\n<h2>Register for value added tax payment<\/h2>\n<p>Value Added Tax (VAT) registration is an important step for any business that wants to operate legally and transparently. VAT registration means that a company or individual becomes a VAT payer and must pay VAT on its sales and services. This process is compulsory if the annual turnover exceeds the set limit, which from 2025 will be 55 thousand. euros. This means that any business with an annual income above this amount must register as a VAT payer and comply with all relevant requirements.<\/p>\n<p>Registration as an ordinary VAT payer may allow businesses to deduct or recover input VAT on qualifying business expenses, subject to the applicable statutory conditions and restrictions. However, businesses applying the Lithuanian Small Business VAT Scheme generally do not charge VAT on their exempt domestic supplies and cannot deduct input VAT attributable to those supplies. VAT registration and entitlement to input VAT deductions must therefore be assessed separately. This can be particularly useful for small businesses looking to optimise their costs and increase profitability. It is therefore important to keep a close eye on your annual turnover and to register as a VAT payer in time if it exceeds the \u20ac55,000. limit.<\/p>\n<h2>VAT and trade in the EU with a VAT identification number<\/h2>\n<ul>\n<li>With regard to VAT and trade on the supply of EU goods from 2025, it should be noted that the tax administrator will provide a VAT identification number with &#8220;EX&#8221; at the end of the number to a<a href=\"https:\/\/saskaita123.lt\/lt\/blog\/kaip-reikia-israsyti-saskaita-faktura-fiziniam-asmeniui\" target=\"_blank\" rel=\"noopener\"> person<\/a> who registers for the purpose of applying the small business scheme in other Member States.<\/li>\n<li>According to the amendment, a person who registers for the purpose of applying small business schemes in other Member States, in order to obtain a VAT payer identification number, will have to submit a preliminary notification to the tax administrator. The tax administrator will provide the VAT payer identification number <a href=\"https:\/\/saskaita123.lt\/lt\/blog\/darbuotoju-atleidimas-tipai-ir-istatymai\" target=\"_blank\" rel=\"noopener\">no later than<\/a> within 35 working days from the date of receipt of the preliminary notification. If it is necessary to conduct an additional investigation to verify the possibility of preliminary notification and assignment of the VAT identification number, the deadline for issuing the VAT identification number set by the decision of the tax administrator may be extended. The VAT identification number will take effect from the date specified in the tax administrator&#8217;s decision to assign a VAT identification number to a person who registers for the purpose of applying small business schemes in other Member States.<\/li>\n<li>In addition, it should be noted that it is also relevant to keep up to date with news on VAT and trade, VAT rates in the EU, tax schemes applicable to this tax, how to pay VAT, etc. on the EU Commission&#8217;s website.<\/li>\n<\/ul>\n<h2>Changes in the composition of VAT payers<\/h2>\n<p>Significant changes to Lithuania&#8217;s VAT registration rules took effect on 1 May 2025. The domestic VAT registration threshold remained EUR 45,000, while the calculation period changed from a rolling 12-month period to the current or preceding calendar year. The reform also introduced the Lithuanian Small Business VAT Scheme and related cross-border simplifications under the EU Small Enterprise Scheme. The proposed increase of the threshold to EUR 55,000 was not enacted. This means that individuals or companies whose annual turnover exceeds this limit will have to register as VAT payers. This change will allow small businesses whose income does not exceed this limit to avoid additional administrative burden and taxes.<\/p>\n<p>Newly established Lithuanian companies may qualify for the domestic Small Business VAT Scheme if their taxable turnover does not exceed EUR 45,000 during the relevant calendar year and they satisfy the applicable statutory conditions. However, VAT registration may still be required for certain intra-EU acquisitions and cross-border services. In such cases, eligible businesses may be able to register under the Small Business VAT Scheme without charging VAT on qualifying domestic supplies. This will give newly established businesses more flexibility and allow them to focus on business development without the burden of additional fees.<\/p>\n<p>These changes are part of a broader tax reform proposed by the Ministry of Finance. The proposal to increase the annual turnover limit to 55 thousand. Euro is part of an amendment to the Value Added Tax Act, which must be approved by the government and the Seimas. The Budget and Finance Committee presented data showing that by increasing the limit to 55 thousand 6.4 million euros, budget revenues from VAT would decrease annually by about 6.4 million euros. euros. However, such a reduction is considered acceptable in order to promote the development and competitiveness of small businesses.<\/p>\n<p>It is important to note that these changes are also linked to a European Council directive that will set the maximum limit of VAT payers at 85 thousand euros from 2025. This means that small businesses in the country will have more opportunities to grow and expand without the burden of additional taxes. Therefore, businesses should closely monitor their annual turnover and register as VAT payers in time in case they exceed the limit.<\/p>\n<\/div><\/div><\/div><\/div><\/div><\/div><\/div><\/section>","protected":false},"excerpt":{"rendered":"Taxes in Lithuania 2025 On 1 January 2025, amendments to the Income Tax Law will come into force in Lithuania, which will affect the operations of many companies in Lithuania. These amendments not only change the corporate tax rates, but also establish new requirements for the acquisition cost of passenger cars and their attribution to...","protected":false},"author":1,"featured_media":33824,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-36143","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorised"],"acf":[],"_links":{"self":[{"href":"https:\/\/tet.lt\/lt\/wp-json\/wp\/v2\/posts\/36143","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/tet.lt\/lt\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/tet.lt\/lt\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/tet.lt\/lt\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/tet.lt\/lt\/wp-json\/wp\/v2\/comments?post=36143"}],"version-history":[{"count":4,"href":"https:\/\/tet.lt\/lt\/wp-json\/wp\/v2\/posts\/36143\/revisions"}],"predecessor-version":[{"id":36165,"href":"https:\/\/tet.lt\/lt\/wp-json\/wp\/v2\/posts\/36143\/revisions\/36165"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/tet.lt\/lt\/wp-json\/wp\/v2\/media\/33824"}],"wp:attachment":[{"href":"https:\/\/tet.lt\/lt\/wp-json\/wp\/v2\/media?parent=36143"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/tet.lt\/lt\/wp-json\/wp\/v2\/categories?post=36143"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/tet.lt\/lt\/wp-json\/wp\/v2\/tags?post=36143"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}