Lithuania: Business Environment
1. Thermal energy supplied for space heating (including thermal energy transmitted through hot water supply systems), to hot water or cold water used for the preparation of hot water, and to thermal energy used to heat water supplied to living quarters.
2. Books and non-periodical information publications (including textbooks, workbooks, encyclopedias, dictionaries, manuals, information leaflets, photo and reproduction albums, children's picture books, drawing and coloring books, music printed or in manuscript form, maps, diagrams and drawings, however, excluding calendars, notebooks and other similar publications).
3. Accommodation services provided in accordance with the procedure laid down in the legislation governing tourism activities, until 31 December 2022.
4. Passenger and luggage thereof transport services on regular transport routes established by the Ministry of Transport and Communications or an institution authorized by it or by municipal authorities.
5. Firewood and timber products intended for heating purposes supplied to household consumers as defined in the Law on Energy.
6. Catering and take-away services provided by restaurants, cafés and other similar catering services, excluding services or part thereof linked to alcoholic beverages, until 31 December 2022.
7. Accessing all types of art and cultural institutions and events, sporting events and sports clubs, and to using services of persons providing services similar to those of sports clubs, when provisions of Article 23 of Law on VAT do not apply, until 31 December 2022.
8. Performance services provided by performers (actor, singer, musician, conductor, dancer or any other person acting, singing, reading, reciting or otherwise giving literary, artistic, folklore or circus performances), until 31 December 2022.
A further reduced rate of 5% applies to:
1. Supply of pharmaceuticals and medical aid equipment, when acquisition costs thereof are fully or partially reimbursed in accordance with the procedure established by Law on Health Insurance of the Republic of Lithuania, as well as to non-reimbursed prescription medicines, except for medicines subject to a VAT rate of 0%.
2. Technical aids and repairs thereof for persons with disabilities.
3. Printed and/or electronic newspapers, magazines and other periodicals (including those published by electronic means), including electronic information documents and/or collections thereof periodically updated by the disseminator of public information or consisting of content substantially similar to that of a printed periodical (regardless of whether the electronic information documents and collections thereof are printed or not). The provisions thereof do not apply to technical, bibliographic and other similar databases, publications of erotic and/or violent nature, publications failing to comply with professional ethics as established by authorized institutions, and to publications where paid advertising makes up more than 4/5 of the total publication or where most of or all of the paid advertising is consisting of music or video content.
VAT rate of 0% applies to certain supplies of goods and services. and to COVID-19 vaccines and COVID-19 vitro diagnostic medical devices (until 31 December 2022).
VAT-exempt goods and services include health care services and goods; real estate rent and disposals; insurance and reinsurance services; certain financial services; cultural and sporting activities; educational services; betting and gaming services; universal postal services; social and related services; radio and television services.
Lithuania | Eastern Europe & Central Asia | United States | Germany | |
Number of Payments of Taxes per Year | 10.0 | 13.9 | 10.6 | 9.0 |
Time Taken For Administrative Formalities (Hours) | 95.0 | 226.2 | 175.0 | 218.0 |
Total Share of Taxes (% of Profit) | 42.6 | 36.5 | 36.6 | 48.8 |
Source: Doing Business, Latest available data.
Income tax (employment income up to EUR 90,246 in 2022 - 60 average salaries) | 20% |
Income above EUR 90,246 | 32% |
Business and professional income | 5% on income up to EUR 20.000 with the rate increasing progressively to a maximum of 15% where annual profit is at least EUR 35,000 |
Income from royalties, interest, sale of property | 15% (20% if the amount exceeds EUR 180,492 for 2022 - 120 average salaries) |
A monthly tax-exempt amount (TEA) applies to employment-related income of Lithuanian tax residents, equal to EUR 460/month for incomes up to EUR 730 (minimum monthly salary for 2022) or reduced progressively for incomes above that amount, up to an income limit of EUR 2,864.22/month. The annual TEA can be applied to Lithuanian tax non-residents only at the end of the tax period by submitting the annual PIT return, provided their annual gross income does not exceed EUR 34,370.67.
Allowances are given for each child (EUR 70, EUR 111 for children with disabilities, large or low-income families).
Business expenses of self-employed individuals are deductible (taxpayers can opt for a lump-sum deduction of 30% or for itemized deductions supported by the relevant documentation).
Residents are taxed on their worldwide income whereas non-residents are only taxed on Lithuania-source income and on income derived from activities through a fixed base in the country. However, only the following income sourced in Lithuania by a non-resident is subject to personal income tax:
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Latest Update: November 2024