Taxes in Europe Database v2
Law of the Republic of Lithuania on Personal income tax No X-1007 was adopted on 2002/07/02. The Law entered into force as of 2003/01/01 and replaced Provisional law on income tax of natural persons No I-641 which was adopted on 1990/10/05 and entered into force since 1991/01/01.
The Law establishes a minimum amount of the fixed amount of income tax on income derived from certain business activity exercised under a business certificate while certain amounts are established by municipal councils.
27.2 % (in 2015) of personal income tax from national budget is allocated to the state budget and 72.8 % (in 2015) is allocated to the local budgets (these proportions for 2015 are established in the Law on the approval of financial indicators of the state budget and municipal budgets of the Republic of Lithuania for 2015 and are revised annually).
All territory of the Republic of Lithuania.
Income tax is paid by an individual (resident or non-resident of Lithuania) who has received income.
The object of income tax is the income of individuals.
Residents are subject to tax on their worldwide income. The non-residents are taxed:
Basis of assessment:
Non-taxable amount for income (NPD) applies only for revenues related with labour corresponding relations. Annual NPD (MNPD ) can not be greater than 1,992 euro, if a resident 's annual income (GMP) does not exceed 3,480 euro. If the GMP exceeds 3,480 euro, MNPD can not be greater than the amount calculated using the following formula:MNPD = 1,992 - 0.26 x (GMP - 3,480).Otherwise, the NPD applied for taxable income in the following order:1) if person's income does not exceed 290 euro per month, the monthly NPD is 166 euro;2) if persons income exceeds 290 euro per month, the monthly NPD is calculated using the following formula:monthly NPD = 290 - 0.26 x (monthly income in relation of employment or corresponding income - 290 euro).3) Third case when calculated by the formula NPD is negative, it is assumed that it is equal to 0.
Under the provisions of the Law some items of income are considered as non-taxable income. They include following:
Certain categories of residents of Lithuania are entitled to tax - exempt amount determined individually:
The additional tax-exempt amount is applied to residents of Lithuania (parents or adoptive parents) raising children under 18 years of age or older if that child is enrolled in the secondary educational. The additional tax-exempt amount is EUR 60 per month for the every child.
Moreover, the following expenses incurred by a resident of Lithuania during the tax period may be deducted from his income:
The total amount of aforementioned deductible expenses can not exceed 25% of the taxable income received during the tax period.
Losses from individual activity can be carried forward without restriction but only if income from that activity are recognized on an accrual basis.
As from 1 January 2010 the personal income tax of 5 % is applied to income from individual activity, except income from liberal professions which are subject to 15 % tax rate.
Income from activities exercised under a business certificate is subject to a fixed amount of income tax determined by municipal councils.
As from 1 January 2009 the personal income tax rate is 15%, except dividends which were subject to 20% income tax until 31 Dec 2013. Since 1 Jan 2014 it is 15% as well.
According to the tax payment procedure, all items of personal income (including tax-exempt income) are divided into two classes: A and B.
A group income is:
B group income includes all items of income other than those attributed to A group.
Income tax from A group income must be withheld and paid to the budget by the payer of income, while B group income must be assessed and tax must be paid by individuals themselves or their authorized persons.
A resident of Lithuania, Lithuanian entity, permanent establishment or non-resident of Lithuania who carries on individual activities through a fixed base, acting in the capacity of a tax withholder, must pay the income tax, withheld from the income paid out before the 15th day of the respective month and attributed to A class income, to the budget before the 15th day of the same month, while the income tax withheld from the income paid out after the 15th day of the respective month must be paid to the budget before the last day of that month.
A resident ofLithuaniawho:
must fill in tax return and pay personal income tax by himself or through authorised person before 1 May of the calendar year following that tax period in which income was received.
The same rule is applied to a non-resident ofLithuaniawho during the tax period has received income from individual activities through the fixed base.
A non-resident of Lithuania who during the tax period received other income attributed to B class income must pay income tax to the budget not later than within 25 days of receipt of that income.
The State Tax Inspectorate under the Ministry of Finance.
Tax on income from specified individual activities may be paid by purchasing a business certificate for a fixed amount of income tax determined by municipal council.