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Lithuania Income Taxes and Tax Laws













Last partial update , May 2014.
  • As of 2014 individuals in Lithuania pay a flat tax of 15% on their income, 5% for income from individual activities. The tax rate for dividend income is 15%.
  • The standard corporate tax rate for 2014 in Lithuania is 15%. Micro companies pay 5% corporate tax subject to terms.
Income Tax for an Individual in Lithuania
  • An individual in Lithuania is liable for tax on his income as an employee and on income as a self-employed person. In the case of an individual who answers the test of a "permanent resident" of Lithuania, tax will be calculated on his income earned in Lithuania and overseas.
    A foreign resident pays tax only on his income in Lithuania.
  • To be considered a Lithuanian resident, an individual must meet the requirement of residence in Lithuania for at least 183 consecutive days in a 12 month period. Occasionally, an individual will be considered a Lithuanian resident even if he is resident in Lithuania for less than 183 days if he/she owns a home in Lithuania that is his/her permanent residence.
  • An employer is obligated to deduct, immediately, each month, the amount of tax and national insurance due from a salaried worker.


Lithuania Corporate Taxes

  • The 2014 standard rate of corporate tax in Lithuania is 15%.
  • There is a participation exemption for dividend income received by companies having a shareholding of 10% or more.
  • Income from a dividend paid by one EEA company to another in Lithuania is exempt from tax, subject to the terms of the law.




Capital Gains in Lithuania

  • In companies in Lithuania, capital gains are added to the regular income
  • Individuals pay 15% tax on capital gains.


Lithuania Deduction of Tax at Source

  • As regards salaried employees in Lithuania, the employer is obligated to deduct tax at source from the salaried employee and to make additional contributions to social security.
  • The social security percentage paid by the employer is 30.98%-32.6% of the salary, and the salaried employee's contribution is 9%, including health tax.


Other deductions in Lithuania
In Lithuania, tax must be deducted at source from the following payments on the following basis:
  • Dividend - The usual deduction is 15%.
  • Interest - The standard rate of tax deducted at source is 10%. Zero for EEA companies .
  • Royalties on patents - The standard rate of tax deducted is 10%.

Comment: Deduction at source for foreign residents is subject to the Double Taxation Prevention Treaty.





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