Consumption taxes

Nature of the tax

Value Added Tax (VAT)

Tax rate

21%

Reduced tax rate

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

Excise duty is imposed on ethyl alcohol and alcoholic drinks, processed tobacco, energetic products, electric energy. 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 and non-resident companies are taxed as general taxable income at a rate of 15%.

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, land tax, land lease tax, environmental tax, tax on natural resources. social security contributions.

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

No, there is no special tax regime for expats. A difference is made between residents and non-residents.

Double taxation treaties

Countries with whom a double taxation treaty have been signed

See the list of the tax conventions signed by Lithuania.

Withholding taxes

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

Bilateral agreement

Sources of fiscal information

Tax Authorities

State Tax Inspectorate under the Ministry of Finance

Other domestic resources

Lithuanian Development Agency
Business and Taxation information
Consult Taxation trends in the European Union.