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SLC-English> Company Formation in Europe> Company Formation in Lithuania> Individual Income Tax in Lithuania
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Individual Income Tax

According to the Lithuanian Individual Income Tax Law it is compulsory for following persons to tax their income:

  1. Citizens of Lithuania with the total revenue
  2. Foreigners with the incomes attained in Lithuania

In Lithuania, a permanent address is defined according to accommodation, by the rule that they have to stay therein at least 183 days of the year.

Of his day, the regulated Individual Income Tax rate was 33 per cent. From I June 2006 this tax rate lowered to 27 per cent and since 1 January 2008 it has been reduced to the final 24 per cent. The lowered tax rate to 15 % has stayed from the last changes untouched and it is used in the following cases :

  1. Receipts from the dispersed profit, including the dividends from a Lithuanian company and a foreign company with a residency in a country, in which there is so called "a white sheet".
  2. Interests;
  3. Receipts of sportsmen and artists;
  4. Fees for licences;
  5. Receipts from bonitary ownership;
  6. Receipts from commercial activity, the tax exception after deduction for expenses;
  7. Receipts from the sale or another transfer of property which is not used commercially;
  8. Positive pension payments and refunded payments from a pension fund;
  9. Positive payouts and refunded bonuses paid within the frame of a life insurance contract;
  10. Reward for the work of sailors (with few exceptions).

Regulated tax rate of 33 % is also used by employers of foreign companies for attained income in Lithuania.

Natural persons can their incomes from certain activities such as translation, further education and similar tax free activities have paid. There are specified licences and licence fees and these fees are paid in a form of the Individual Income Tax.

There are another Individual Income Tax exceptions, for example interests from the credit acceptance with a term of expiration longer that one year; lottery profits when a lottery company pays the lottery tax; profits from speculation in bank operations with the valuables when those are held longer than a year and if a person liable to pay tax has a share in a company is smaller than 10 per cent.

Parts of the income from different job operations (for example company) must be resumed and taxed; another parts which are advantaged must be included independently at annual income-tax return.

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