Lithuania Tax

• As of 2020 individuals in Lithuania pay a flat tax of 15% on their income,20%/32% for salary income 5% for income from individual activities.
  The tax rate for dividend income is 15%.
• The standard corporate tax rate for 2020 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 2020 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.
  The rate is 20% when the gain exceeds 120 times the average salary.

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

• 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%.
• For nonresidents - The rate is 15%.