National regulation and international agreements

Consumption taxes

Nature of the tax

Value Added Tax

Tax rate

18%

Reduced tax rate

Reduced rates exist in the Lithuanian taxation system. Reduced rates of 9% apply to construction, renovation and insulation of residential houses financed from state and municipal budget resources. A further reduced rate of 5% applies to pharmaceutical and medical equipments, cultural and sporting events and books and similar items. A 0% rate applies to exports, insurance and financial services related to export, transport services directly related to the export of goods and goods supplied to another European Union member state.  Are exempted of VAT: items included in education, healthcare, insurance and financial services, the leasing of dwellings and other immovable property, the sale or transfer of immovable property, and social, cultural, sports, radio and television services if supplied by non-profit seeking entities.

Other consumption taxes

To get further information on VAT rates, please check the list of VAT rates applied within the European Union

More detailed information on excise duties is available concerning alcoholic beverages, tobacco products, energy products on the European Commission website.

Corporate taxes

Tax rate

Capital gains taxation

Capital gains of resident companies including permanent establishments are taxed as general taxable income at a rate of 15%.

 

In the case of nonresidents, only capital gains on the transfer of immovable property are taxed at 10%.

Main allowable deductions and tax credit

When calculating the taxable profit of Lithuanian or foreign unit, tax exempt income and allowable deductions are deducted from income.

 

Tax exempt income includes:

-gain from sales of shares, received from an EU company or a company registered in a country with which Lithuania has a double tax treaty,

-received insurance payments,

-proceeds of a bankrupt company

-received penalties and fines

Allowable deductions include:

-depreciation and amortization of fixed assets

-maintenance, repair  and construction of fixed assets

-business trips, advertizing and entertaining

-bad debts.

 

Other corporate taxes

Real property tax exists varying from 0.3% to 1% of the value of real estate owned by legal persons.

Royalties are also taxed ; the withholding tax rate is 10% for royalties paid to non resident companies unless reduced under a tax treaty.

Excise tax is also levied on production or import of alcohol and alcoholic beverages, tobacco products, fuel, electricity.

Individual taxes

Tax rate

Allowable deductions and tax credit

The following items among others are allowed for income tax deductions:

-life insurance premiums,

-pension contributions paid to the pension funds registered in Lithuania or other EU member states

-interest paid for the loan financing of acquiring dwellings

-amounts paid by Lithuanian residents for higher education studies.

-amounts paid for the purchase of a computer during the period from 2004 to 2009.

Special expatriate tax regime

Taxpayers are resident and non-resident individuals. Foreign individuals staying in Lithuania for 183 days in a tax year or staying in Lithuania with or without breaks for 280 or more days during two consecutive calendar years as well as individuals whose social and economic interest is in Lithuania are considered to be residents for personal tax income.

 

Taxable income of non-resident individuals includes:

-interest

-income from distributed profit

-authorship remuneration

-employment income

-income from sports activities

Double taxation treaties

Countries with whom a double taxation treaty have been signed

Worldwide Tax and finance site

Whithholding taxes

Dividends: 0/15%, Interest: 10%, Royalties: 10%

Bilateral agreement

Sources of fiscal information

Tax Authorities

Ministry of Finance

Other domestic resources

Business and Taxation information