Tax in Lithuania

Who is the tax authority and where do filings live?

Lithuania's Valstybine mokesciu inspekcija (VMI, State Tax Inspectorate), under the Ministry of Finance, administers Lithuania's tax system [SC1]. Customs is administered separately by Lithuanian Customs. Filings flow through the Mano VMI / EDS portal. The credentialed Lithuanian tax-and-accounting professions are CA Lithuania regulated by the Lithuanian Chamber of Auditors. Substantive law: Personal Income Tax Law (Gyventoju pajamu mokescio istatymas, GPMI), Corporate Income Tax Law (Pelno mokescio istatymas, PMI), VAT Law (Pridetines vertes mokescio istatymas), Tax Administration Law, Top-up Tax Law, and successive amendments. Lithuania has been an EU member since 2004 and applies the EU VAT Directive 2006/112/EC; euro adoption 1 January 2015; Schengen since 21 December 2007.

What is the tax year and when are returns due?

The individual tax year is the calendar year. Personal income tax returns are due 1 May of the year following the tax year via EDS [SC1]. Corporate fiscal years align with the calendar year (with limited exception); annual corporate returns are due by 15th day of the sixth month after fiscal year-end. VAT returns are filed monthly by the 25th of the following month under the standard regime. Annual financial statements are required for in-scope corporations.

Who is a Lithuanian tax resident?

Under the GPMI, an individual is tax resident in Lithuania if (a) being physically present in Lithuania for at least 183 days in a calendar year, OR (b) being physically present for at least 280 days in any consecutive two-calendar-year period AND at least 90 days in one of those years, OR (c) maintaining their permanent residence (centre of vital interests) in Lithuania, OR (d) being a Lithuanian citizen working abroad as a Lithuanian state employee [SC2]. Residents are taxed on worldwide income; non-residents on Lithuanian-source income at flat or schedular rates. Treaty tie-breakers apply.

What are the personal income tax rates?

Personal income tax brackets for 2024: 20 percent up to 60 average national wages (~EUR 105,498 annually); 32 percent above [SC1]. Personal allowance NPD (Neapmokestinamasis pajamu dydis) is annually adjusted. Investment income (dividends from Lithuanian companies) faces 15 percent flat. Capital gains face 15 percent flat (with 5-year-holding exemption for certain categories). Mandatory social insurance contributions (Sodra) add 19.5 percent (employee-side, including pension/health/unemployment) and 1.77 percent (employer-side, with progressive elements).

How does Lithuania's corporate tax work?

The corporate income tax (Pelno mokestis) rate is 15 percent for 2024 (raised to 16 percent for fiscal years from 1 January 2025 under the 2024 Defense Finance Reform Law) [SC2]. Reduced rate of 5 percent (raised to 6 percent for 2025) applies to small enterprises (Sodra-registered employees up to 10, annual revenue up to EUR 300,000). Withholding tax on dividends to non-residents is 15 percent (treaty rates apply; 0 percent for EU/EEA participation under Parent-Subsidiary Directive). Pillar Two QDMTT pending under the delayed-implementation election (Lithuania, like Estonia and Latvia, elected the EU Directive 2022/2523 Article 50 delayed implementation effective 31 December 2029) [SC3]. Tax loss carryforwards: indefinite (with 70 percent annual offset cap on losses older than 7 years). R&D super-deduction 300 percent.

What about PVM (VAT)?

The standard VAT (Pridetines vertes mokestis, PVM) rate is 21 percent [SC4]. Reduced rates: 9 percent (basic foodstuffs, books, accommodation, public transport) and 5 percent (specified pharmaceuticals, specified disabled-person assistive devices). Zero-rated supplies include exports. Registration threshold is EUR 45,000 annual turnover. EU OSS/IOSS regimes apply.

How are cryptoassets taxed?

Lithuania taxes individual cryptoasset disposal gains under the GPMI as 'income from sale of property' at 15 percent flat (matching the capital-income rate) [SC2]. Mining and staking are 'self-employment' or 'business income' at applicable rates. EU MiCA Regulation applies from 30 December 2024 with crypto-asset service providers supervised by the Bank of Lithuania.

What is the treaty network and what are the audit triggers?

Lithuania has approximately 60 active double tax treaties [SC5]. EU directives apply alongside treaties. Lithuania ratified the OECD MLI on 11 September 2018 with modifications entering force from 1 January 2019 onward. Audit triggers include disproportionate VAT credits, transfer-pricing non-compliance, undeclared bank deposits flagged via DAC2/CRS, and EDS-data reconciliation. Standard SOL is 3 years; 5 years for material errors; extended for fraud.

What are the common penalties and pitfalls for foreigners?

The Lithuanian penalty framework imposes administrative-fine sanctions for late filings, failure to file, incorrect declarations (50-100 percent surcharge), and failure to maintain accounting records [SC5]. Default interest accrues at the prevailing rate plus statutory margin. Tax-evasion criminal exposure under the Criminal Code carries fines and imprisonment for grossly-significant evasion. Common foreign-national pitfalls: (1) the 280-day-over-2-year-with-90-day-minimum residency test creates fact-pattern complexity; (2) the post-2024 Defense Finance Reform raised CIT to 16 percent and SME rate to 6 percent from 1 January 2025; (3) Pillar Two QDMTT pending under delayed-implementation election; (4) the 32 percent top PIT bracket above ~EUR 105,498 catches expat-package compensation; (5) Sodra 19.5 percent employee-side creates substantial deduction; (6) MiCA from 30 December 2024 introduced CASP-licensing changes; (7) MLI ratified 2018; (8) PVM 21 percent registration threshold EUR 45,000; (9) EU member status; (10) cross-border digital under EU OSS/IOSS.