Tax in Lithuania

Who is the tax authority?

Valstybine mokesciu inspekcija (VMI, State Tax Inspectorate) administers Lithuania's tax system. VMI sits under the Ministry of Finance. Lithuanian Customs handles customs duties separately.

Filings flow through the Mano VMI / EDS portal. The credentialed profession is CA Lithuania, regulated by the Lithuanian Chamber of Auditors (Lietuvos auditoriu rumai).

The legal foundation rests on five key statutes: the Personal Income Tax Law (GPMI), the Corporate Income Tax Law (PMI), the VAT Law (PVM), the Tax Administration Law, and the Top-up Tax Law for Pillar Two. Lithuania also applies the EU VAT Directive 2006/112/EC as an EU member since 2004.

What is the tax year and when are returns due?

Lithuania's individual tax year is the calendar year (1 January to 31 December). Personal income tax returns are due 1 May of the following year via EDS.

Corporate fiscal years follow the calendar year (with limited exceptions). CIT annual returns are due by the 15th day of the sixth month after fiscal year-end. VAT-registered businesses file monthly PVM returns by the 25th of the following month.

Who counts as a Lithuanian tax resident?

The GPMI defines four routes to Lithuanian tax residency. Any one of them is enough:

• Physical presence in Lithuania for at least 183 days in a calendar year
• Physical presence for at least 280 days in any two consecutive calendar years AND at least 90 days in one of those years
• Permanent residence (centre of vital interests) in Lithuania
• Lithuanian citizens working abroad as Lithuanian state employees

Residents pay tax on worldwide income. Non-residents pay tax only on Lithuanian-source income. Treaty tie-breakers apply when residency conflicts arise under the 280/90-day test.

Deep-dive: see expat and cross-border tax in Lithuania for the practical rules around moving in or out mid-year.

What are the personal income tax rates?

Lithuania uses a two-tier personal income tax structure — not a single flat rate. Both tiers apply above the annual NPD personal allowance, which VMI adjusts each year.

On top of PIT, social insurance (Sodra) adds significant cost. Both employer and employee sides apply:

Self-employed individuals under the Simplified Business Income (SEA) regime pay an effective 15% rate on declared business income, plus Sodra contributions on a minimum base.

Deep-dive: see self-employed tax in Lithuania for how all charges stack for freelancers.

How does corporate tax work?

Lithuania's corporate income tax (Pelno mokestis) uses a standard rate plus a reduced rate for small enterprises.

Withholding tax on dividends paid to non-residents is 15%. Treaty rates apply — often reducing this further. EU/EEA subsidiaries receiving dividends benefit from the Parent-Subsidiary Directive (0% WHT where conditions are met). The R&D super-deduction allows 300% deduction on qualifying research expenditure. Tax losses carry forward indefinitely with a 70% annual offset cap on losses older than 7 years.

Deep-dive: see small business tax in Lithuania for sole-trader vs UAB incorporated comparison.

What about PVM (VAT) and other indirect taxes?

Lithuania's PVM (Pridetines vertes mokestis) is the national implementation of EU VAT. The standard rate is 21%.

PVM registration becomes mandatory once annual turnover passes EUR 45,000. Below that, registration is voluntary. EU OSS (One Stop Shop) and IOSS (Import One Stop Shop) regimes apply for cross-border digital services and distance selling.

Deep-dive: see VAT in Lithuania for the full PVM mechanics including EU cross-border rules.

Currency framework: euro since January 2015

How are cryptoassets taxed? (MiCA hub)

Lithuanian individuals pay 15% flat on cryptoasset disposal gains under the GPMI, treated as "income from sale of property" — the same rate as other capital income. Mining and staking income falls under self-employment or business income rules at applicable rates.

Deep-dive: see crypto taxation in Lithuania for the GPMI capital-income rules and MiCA licensing changes.

Meet a Lithuania-resident taxpayer

What is the treaty network?

Lithuania has approximately 60 active bilateral tax treaties. The MLI was ratified on 11 September 2018, with modifications entering force from 1 January 2019. The US-Lithuania DTA (1998) is notable — it was one of the few bilateral treaties concluded early between the US and a former Soviet-sphere state.

EU directives (Parent-Subsidiary, Interest and Royalties, Mergers) apply alongside bilateral treaties for EU-sourced income. Standard statute of limitations is 3 years; 5 years for material errors; extended for fraud.

Deep-dive: see tax treaty relief in Lithuania for rate schedules under each DTA.

Where does Lithuania sit in the Baltic trio and EU CEE cohort?

Lithuania anchors the Baltic trio alongside Estonia and Latvia. All three are small EU members on the eastern Baltic coast with eurozone membership, Schengen access, and NATO membership. The broader EU Central and Eastern European (CEE) peer group adds Poland as a direct neighbour.

Baltic trio euro-adoption sequence: Estonia (2011) → Latvia (2014) → Lithuania (2015). The Litas was pegged to the euro at 1 EUR = 3.4528 LTL from 2002 until replacement. All three now share a contiguous eurozone bloc on the EU's eastern frontier.

Common pitfalls and penalties

Foreign companies and individuals frequently encounter these traps when operating in Lithuania:

Who provides tax compliance services in Lithuania?

Tax compliance work in Lithuania is handled by licensed accounting and audit firms - international networks in Vilnius and Kaunas alongside local outsourced-accounting providers. A routine engagement covers registration with VMI (the State Tax Inspectorate), periodic VAT returns for registered traders, payroll withholding and social contributions, and the annual income declarations, filed through the authority's electronic channels. Cross-border groups typically layer treaty relief on top of the standard filings, and foreign-owned entities often outsource the whole calendar to one local provider.

Credentials matter more than branding. The Lithuania directory lists the recognised professional bodies and shows how to verify an accountant or auditor before engaging one, and the treaty relief page covers the cross-border rules a compliance provider works with.

When should you speak to a Lithuanian tax professional?

Some situations are routine through EDS Online. Others get complicated quickly:

• Your income crosses the 32% bracket (above ~EUR 105,000 per year)
• You have cross-border income under a DTA (Germany, UK, US, Nordic countries, etc.)
• You hold or operate a crypto-asset service under MiCA or a pre-MiCA Lithuanian license
• Your residency status is unclear under the 183-day or 280/90-day tests
• You are setting up a Lithuanian UAB and want to use the 5%/6% SME CIT rate
• You received a VMI notice, audit letter, or assessment
• Your business has EU-sanctions exposure through Kaliningrad or Belarus trade links
• You are a non-resident with Lithuanian-source income and a treaty claim to verify

You can find vetted Lithuania practitioners through the directory below.

This page is general information. It is not personal guidance for your specific situation. Tax rules change. Always check current figures on the VMI website or with a licensed Lithuanian practitioner before filing.