STI Income Tax Brackets in Lithuania for 2024

With just under three days for a new business to get started, Lithuania is a top country for ease of doing business. It places third in Central and Eastern Europe (CEE) for business regulation and third globally for corporate tax competitiveness. Lithuania provides a fast online system for the registration and payment of taxes and its IT-based tax administration (i.MAS) contributes to effective and efficient tax administration. The tax system in Lithuania is administered by the official tax body, the State Tax Inspectorate (Valstybinė mokesčių inspekcija) (STI/VMI).

The Law on Personal Income Tax and the Law on Corporate Income Tax provide guidance and support in the form of income tax tables for individuals and businesses respectively. Taxpayers must familiarize themselves with these tax tables and the corresponding income tax brackets and income tax rates, for effective tax planning and to remain compliant with the tax laws of Lithuania.

Here, you will learn more:

• headline tax rates
• personal income tax (PIT) rates
• corporate income tax (CIT) rates
• capital gains tax (CGT) rates
• withholding tax rates for residents and non-residents
• value-added tax (VAT) rates

Headline Tax Rates in Lithuania

Personal Income Tax (PIT) Brackets for Individuals in Lithuania for 2024

Income tax rates differ for residents and non-residents. Resident individuals pay tax on worldwide income. Non-resident individuals may be taxed on several sources of income including income sourced in Lithuania, income from distributed profits, from sports or performing activities, and from rent or the sale or transfer of immovable property located in Lithuania.

Employees must pay two rates of income tax related to employment: a flat rate and a progressive rate. Employment expenses are not deductible from an employee’s compensation. However, a monthly tax-exempt amount (TEA) is applied to a tax resident’s employment-related income. A self-employed individual may be taxed at a flat 15% PIT for their income including income from rent, sale or transfer of property.

Taxpayers may access My STI, the electronic service platform that allows for payments, renewals, reminders, e-filings, and taxpayer registrations. Both natural persons and legal entities can use these services but are required to register beforehand.

Personal Income Tax Due Dates

Corporate Income Tax (CIT) Rates in Lithuania for 2024

Companies registered in Lithuania and foreign entities are subject to Lithuanian corporate tax. The former’s tax base shall be all income earned in Lithuania and elsewhere. A foreign entity’s income through their permanent establishments (PEs) in Lithuania is subject to tax, including income from distributed profits, from the sale or transfer of immovable property, from sports or performing activities, and compensations for violation of copyright.

Several tax reliefs are available such as for investments in R&D activities, investments in technological renewal, for the production of a film, for implementation of large projects, and for those in free economic zones.

Corporate Income Tax Due Dates

Capital Gains Tax (CGT) in Lithuania

The headline Capital Gains Tax (CGT) in Lithuania are tabulated below:

Withholding Tax Rates for Residents and Non-Residents in Lithuania

In general, withholding tax (WHT) is levied on residents and non-residents in Lithuania. Rates vary depending on the source of income concerned and may range from 10% to 15%. However, some sources apply 0% tax such as interest paid to entities established in the European Economic Area (EEA).

Lithuania has over 50 bilateral double taxation agreements in place which means varying WHT rates. A taxpayer may benefit from the provisions of such agreements.

Value-Added Tax Rates in Lithuania

Different Value-Added Tax (VAT) rates outlined in the Law on Value Added Tax are applied to certain goods and services.