Taxes in Lithuania

Lithuania’s tax system is divided into direct and indirect taxes.

Direct taxes include:

  • Corporate income tax
  • Property tax on enterprises and organizations
  • Land tax
  • Personal income tax
  • Income tax and gifts

Indirect taxes include:

  • VAT
  • Excise duties
  • Tax on gambling and lotteries

Other taxes and contributions to the State budget:

  • Social insurance contributions
  • A tax on public natural resources
  • A tax on oil and natural gas
  • A tax on environmental pollution
  • Consular fees
  • Stamp duty
  • Sales tax

Corporate tax on profits

Rate: 5% or 15%.

5% is applied if the company meets the following criteria during the reporting period:

  • Sales revenue does not exceed EUR 300,000 per year
  • Number of employees not exceeding 10;
  • If shareholders hold more than 50 per cent of shares in other companies, the first two criteria of both companies are added together.

The 15 per cent rate is applied in all other cases.

VAT

Rate 21 per cent

The company is obliged to register the VAT by the payer if:

  • Income in the last 12 months exceeded €45,000
  • EU purchases this year exceeded or exceed €14,000

If the shareholder has more than 50% of shares in other companies, the criteria are summed up for all companies.

The rate of 9 per cent is applied to:

  • To passenger transport on regular routes
  • On books and non-recurrent information publications
  • For certain accommodation services (until 31 December 2022)
  • Provision of thermal energy and hot water for residential use
  • Wood and wood products for domestic energy heating

The rate of 5 per cent is applied to:

  • Medicines and medical aids
  • Equipment for the technical support of persons with disabilities and its repair
  • Periodicals

Salary taxation

The gross minimum wage in Lithuania is EUR 642 and is taxed as follows:

  • Income tax 20% (up to EUR 81,162 per year)
  • Social Insurance Tax for Employee 19.5% (includes 6.98% health insurance contributions)
  • Social Insurance Tax for Employer 1.79% (includes 0.32% for Guarantee Fund and Long-term Unemployment Fund)
  • Pension fund 2%

Personal income tax

  • 20% rate with annual labour income up to EUR 81,162 gross
  • Rate 32% with annual earnings above EUR 81,162 gross
  • Income tax is levied on the permanent resident’s income received both in Lithuania and abroad.

Dividend taxation

  • Rate 15% (exceptional 0%)
  • 0% applies if the recipient is a resident of the EU or another State with which a tax convention has been concluded
  • Lithuania has concluded more than 55 double taxation agreements, including with EU countries, India, Georgia and Ukraine.

Company in Lithuania UAB provides legal advice on taxation. Please contact us and your present enquiry.

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