Taxes in Lithuania

The Republic of Lithuania has a business-friendly tax policy and the tax system is aligned with EU legislation. The Lithuanian tax system has changed dramatically since 1990 to support foreign investment and the development of the labour market.

Taxes and other dues shall be charged to the budget on the order of the Supreme Council; however, regional and city councils deal with tax issues separately. In Lithuania, the basic principles of tax payment and their regulation are governed by the Law on Tax Administration, which defines the rights and obligations of the tax administrator and the taxpayer, as well as the procedure of tax calculation and the amounts to be collected.

Corporate income tax
Corporate income taxpayers are businesses that carry on business and are also taxed by non-profit organizations that make a profit from their commercial activities.

Personal income tax
The gradual reduction of personal income tax was started in 2006. Nowadays, every natural person is obliged to pay a personal income tax of 15% if he is employed or self-employed.

Real Estate tax
The real estate tax in Lithuania ranges from 0.3% to 3%. Private real estate is generally taxed at 1% of the value of the property above € 220,000. This threshold is raised to € 286,000 for families with three or more minor children (under 18 years) or children with disabilities requiring special care

Value Added Tax (VAT)
VAT is not calculated and paid to persons whose income from the sale of goods and provision of services (excluding long-term investment) is of public interest, such as food, postal services, etc.

Land tax
In Lithuania, land tax covers only land taxes, and the rules for calculating and paying this tax are set by city and district councils. Land subject to land tax is privately owned, with an annual rate ranging from 0.01% to 4% of the value of the land.