FAQ for Lithuania in English

What are general business taxes to pay? 

Business taxes depend on the activity and the form of business.

Main business taxes in Lithuania:

  • Personal Income Tax;
  • Compulsory Health Insurance;
  • State Social Insurance;
  • Corporate Income Tax;
  • Value Added Tax;
  • Real Estate Tax;
  • Excise duty.

More information:

Main business taxes in Lithuania:

Personal Income Tax (GPM) 20% or 27%

This tax is levied on the income of single persons. Personal income tax also applies for other work non-related income (sale of securities, received dividends, etc.).

More information:

Law on Personal Income Tax of the Republic of Lithuania: https://e-seimas.lrs.lt/portal/legalAct/lt/TAD/TAIS.319033?jfwid=rivwzvpvg

Compulsory Health Insurance (PSD) 6.98%

Deducted from the employee’s salary.

Guarantees free health care and treatment.

More information:

Law on Health Insurance of the Republic of Lithuania: https://e-seimas.lrs.lt/portal/legalAct/lt/TAD/224f56c0507811e485f39f55fd139d01?jfwid=q8i88kxfa

State Social Insurance (VSD) 12.52% (paid by the employee) and 1.77-3.75% (paid by the employer). Guarantees pension, sickness, maternity leave benefits, etc.

More information:

Law on Social Insurance of the Republic of Lithuania: https://e-seimas.lrs.lt/portal/legalAct/lt/TAD/f85b15f062c011e5b316b7e07d98304b?jfwid=5sjolge5y

Corporate Income Tax — 15% or 5%

Is paid by companies from their net income.

Newly registered entity is subject to 0% corporate income tax rate during the first taxable period, under the following circumstances:

  • The average number of employees during the first taxable period does not exceed 10;
  • Income per the first taxable period does not exceed EUR 300,000;
  • Participants are natural persons;
  • Within three consecutive taxable periods, including the first tax period, entity’s activity is not suspended, the entity is not liquidated, reorganized, shares of the entity are not transferred to new participants.

More information:

Law on Corporate Income Tax of the Republic of Lithuania:

https://e-seimas.lrs.lt/portal/legalAct/lt/TAD/1375cd60a50f11e8aa33fe8f0fea665f?jfwid=ck9gyaymo

Value Added Tax (PVM) — 21%

Tax is paid by Lithuanian and foreign natural and legal persons, engaged in any type of economic activity in Lithuania.

Companies must be registered as VAT payers, however a special scheme for small enterprises is implemented in Lithuania which exempts such undertakings from this duty (see Article 71 of the Law on VAT).

Some goods and services are subject to reduced VAT — 9% and 5% VAT rates.

0% VAT rate is levied on the goods and services listed in Articles 41-53 of the Law on VAT.

VAT exempt goods and services are listed in Articles 20-33 of the Law on VAT.

More information:

Law on Value Added Tax of the Republic of Lithuania: https://e-seimas.lrs.lt/portal/legalAct/lt/TAD/TAIS.175434?jfwid=ck9gybq1y

Real Estate Tax (NTM) — 0.3-3%

Real estate tax is paid by natural and legal persons owning real estate.

More information:

Law on Immovable Property Tax of the Republic of Lithuania: https://e-seimas.lrs.lt/portal/legalAct/lt/TAD/TAIS.409446?jfwid=rivwzvpvg

Excise duty is a type of tax charged on certain goods:

Ethyl alcohol and alcoholic beverages;

Processed tobacco;

Fired tobacco products;

E-liquid;

Energy products;

Electricity.

More information:

Law on Excise Duties of the Republic of Lithuania: https://e-seimas.lrs.lt/portal/legalActPrint/lt?jfwid=-fxdp7gsr&documentId=TAIS.160467&category=TAD

https://www.vmi.lt/cms/en/akcizai