Annual Taxable Income (Euros)
upto 14,000 Euros
16,000 to 36,000 Euros
Above 36000 Euros
The law is to enter into force Jan. 1, 2016, after getting Seimas approval will be applicable for the calculation of personal income tax for 2016 and subsequent tax periods.
Income tax is levied on individuals who are resident in Lithuania for tax purposes or on individuals who are not resident but receiving a Lithuanian sourced income.
The residence of an individual is judged by the individual circumstances in each case. The criteria is laid down in the laws and principally outlines the requirements as:
Personal, social or economic interests in Lithuania
Spending a specified period of time in Lithuania (residents are recognised foreign individuals staying in Lithuania with or without breaks for no less than 183 days in a calendar year, or staying in Lithuania with or without breaks for no less than 280 or more days during two consecutive calendar years, where the stay in Lithuania during one of these years lasted at least 90 days).
Permanent residents pay income tax on their worldwide income.
Lithuania Income Tax Rate for Individual Tax Payers
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%.
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.
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.
In companies in Lithuania, capital gains are added
to the regular income
Individuals pay 15% tax on capital gains.
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.
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.
The tax period is a calendar year. Certain kinds of income are taxed at the moment of payment.
Depending on the particular type of income, the tax is paid
and tax returns presented monthly or annually. All income,
according to the tax payment procedure, is divided into two
classes: ?A? and ?B?.
Income of A class comprises income from which the income tax is calculated and paid to the budget by persons paying out income, for example income incidental to employment relations or relations in their essence corresponding to employment relations, income from sports or performing activities, royalties, interest, income from artistic activities, income from property rent, etc.
Income of B class comprises income from which the tax is calculated, paid to the budget and declared by an individual, for example, winnings from gaming and lotteries, any income received from individuals of foreign states and from entities of foreign states (not through a permanent establishment) residing abroad, income from a resident of Lithuania (except for income incidental to employment relations, interest, royalties, etc.), income from the sale or other transfer into ownership of immovable property (e.g. a building, land) and of movable property where such type of property is subject to legal registration (e.g. a car), income from individual activities (except for income from individual activities from the sale or other transfer into ownership of non-felled forest, round wood, base metal scrap), etc.
A resident of Lithuania who during the
tax period received income attributed in accordance with the tax
payment procedure to both A and B classes must, after the end of
the tax period and before 1 May of the calendar year following
that tax period, either himself or through a person authorised
by him submit an annual income tax return to the tax
administrator for the previous tax period and declare therein
all the income received during the previous tax period and the
income tax calculated in respect of such income.
Income tax by an individual must be paid after the end of calendar year, before 1 May of the following calendar year.