Lithuania
Corporate taxes and other direct taxes
The general rate for corporate income tax is 15% in Lithuania. An incentive corporate income tax rate of 5% is applied to small companies with an annual turnover of up to EUR 300,000 and with no more than 10 employees. Small companies can apply a 0% corporate income tax rate for their first financial year.
In Lithuania, the ordinary losses incurred may be carried forward to the subsequent taxable periods for an unlimited time, as long as the entity continues the activities that generated the losses. The amount of losses carried over to the subsequent taxable periods is limited to 70% of taxable profit for the corresponding taxable period. The 70% limit does not apply to small companies. Capital losses associated with the transfer of derivative financial instruments and securities may only be carried forward for 5 years and can only be covered from future capital gains.
Under certain conditions there is no withholding tax on dividends, interest, or royalty paid by a Lithuanian company to a foreign company. Lithuania has a wide international treaty network with more than 50 double tax treaties.
Companies are also subject to two types of taxes on capital:
• Immovable property tax: tax on property deemed to be immovable by law and located in Lithuania (buildings and constructions, unfinished constructions excepted). The annual tax rate varies from 0.5% to 3% of the taxable value of immovable property. Tax rates are set by municipalities according to the territory where the immovable property is located. The tax period is a calendar year.
• Land tax: tax on land owned in Lithuania, to be paid by both resident and non-resident entities and individuals. The tax rate varies from 0.01% to 4% of the taxable value of the land. Tax rates are set by municipalities and depend on the location of the land. The tax period is a calendar year.
Level of attention paid by Tax Authority:
VAT and other indirect taxes
The general rate is 21%, the reduced rates are 9% (e.g., books, central heating, public transportation, tourist accommodation and catering [until 31 December 2023], cultural and sports activities [until 30 June 2023], the activities of performers, such as singers, actors, etc. [until 30 June 2023] and 5% [e.g. medicine, journals, newspapers, and technical aids for the disabled]). The options/limits based on the EU Directive are presented within the VAT legislation.
Other types of indirect tax in Lithuania include excise duty, the environmental protection charge, and the data storage device tax.
| VAT options in Lithuania |
Applicable / limits |
| Distance selling |
EUR 10,000/year; the OSS system is applicable. |
| Call-off stock |
 |
| VAT group registration |
 |
| Cash accounting - yearly amount in EUR (approx.)* |
No, it is an optional regime for agricultural producers only. |
| Import VAT deferment |
|
| Local reverse charge |
Taking over property as a transfer of contribution to a legal entity; taking over a material improvement of a building; supply of certain types of scrap metal; supply of construction services; supply of mobile phones, tablets, and laptops (applicable until December 31, 2026). |
| Option for taxation |
| - letting of real estate |
|
| - supply of used real estate |
|
| VAT registration threshold* |
Local taxable person – EUR 45,000 /12 months; Foreign taxable person – No. |
Personal income tax / Social security system
Employment-related income, board member fees, royalties received from an employer, and income under a civil agreement received by a manager of a small partnership who is a member of the small partnership are taxed at the rate of 20% in cases where income does not exceed EUR 114,162 per calendar year in 2024. PIT at a rate of 32% is applied to excess amounts.
Income from profit distribution is taxable at a flat PIT rate of 15%.
Other income (e.g. interest, royalties, capital gains, rental income) is taxable at a PIT rate of 15% in case such income does not exceed EUR 228,324 per calendar year in 2024. PIT at the rate of 20% is applied to amounts that exceed this.
Income in general is recognized at the moment of its actual receipt.
The gross salaries of employees are also subject to social contributions at a rate of 19.5%, which the employer is required to deduct. The employer also has to pay 1.77% in social contributions on top of the employee’s gross salary. An additional 3% contribution may be paid by individuals who have decided to accumulate an additional pension (the employer is required to deduct this tax).
Lithuania is subject to EU regulations laying down social security principles for persons migrating between EU Member States.
Wage related taxes
in Lithuania |
Minimum wage
|
Average wage
in private sector |
| |
in EUR |
|
in EUR |
|
| |
924 |
|
1,903 |
|
| Total wage cost |
940 |
101.77% |
1936 |
101.77% |
| Social contribution tax |
16 |
1.77% |
34 |
1.77% |
| Gross salary |
924 |
100.00% |
1,903 |
100.00% |
| Personal income tax* |
35 |
20.00% |
329 |
20.00% |
| Employees' social contributions |
180 |
19.50% |
371 |
19.50% |
| Net salary* |
808 |
76.67% |
1,203 |
63.71% |
* Non taxable allowance of EUR 747 (on minimum wage) and EUR 257.5 (on average wage)