Updated: 3 September 2026

Lithuania Tax Rates 2026: Personal Income Tax, Corporate Tax, VAT and Withholding

Lithuania applies progressive personal income tax rates, a 17% standard corporate income tax rate for 2026, a 21% standard VAT rate, and separate rules for dividends, investment income, non-residents and social insurance. This guide summarizes the principal 2026 rates and links to current official Lithuanian sources.

Lithuania Personal Income Tax Rates for 2026

From 1 January 2026, the principal progressive personal income tax bands are based on Lithuania's average wage measure (VDU). For 2026, one VDU used for these thresholds is �2,312.15.

Annual income band	2026 threshold	Rate
Up to 36 VDU	Up to �83,237.40	20%
Above 36 VDU up to 60 VDU	�83,237.40 to �138,729	25%
Above 60 VDU	Above �138,729	32%

Not every category of income follows these bands in the same way. Dividends and certain specified income remain taxable at 15%, while particular non-employment income may use a 15% rate up to 12 VDU before the higher progressive rules apply. The applicable classification should therefore be checked for each income type.

Individual Activity / Self-Employment Income

For individual activity under a certificate, taxable profit up to �42,500 is calculated using a 20% headline personal income tax rate reduced by an income-tax credit. The effective rate is 5% where annual taxable profit does not exceed �20,000 and rises progressively to 20% as taxable profit increases to �42,500. Above �42,500, the credit no longer applies and the income is combined with other relevant annual income for the 20%, 25% and 32% progressive rates.

Corporate Income Tax in Lithuania for 2026

Category	2026 rate / treatment
Standard taxable profits of Lithuanian entities and Lithuanian permanent establishments	17%
Qualifying small entities with annual income not exceeding �300,000	0% for the first and second tax periods and 7% for subsequent periods, subject to statutory conditions and exclusions
Tax period	Generally calendar year; another tax period may be approved where appropriate

The corporate tax base generally consists of taxable income less allowable deductions and applicable reliefs. Lithuania also has participation-exemption rules for qualifying dividends. A common exemption applies where the recipient holds at least 10% of the voting rights for an uninterrupted 12-month period, subject to the detailed statutory conditions and anti-abuse rules.

VAT Rates in Lithuania for 2026

VAT category	Rate
Standard VAT rate	21%
Reduced VAT rate	12%
Reduced VAT rate	5%
Qualifying zero-rated transactions	0%

The 12% reduced rate replaced the former 9% reduced rate from 1 January 2026. The reduced and zero rates apply only to transactions specifically covered by the VAT Law; the 21% standard rate applies unless a reduced rate, zero rate or exemption is available.

Capital Gains and Investment Income

For companies, gains are generally included in taxable corporate profits unless a specific exemption applies. For individuals, the treatment depends on the asset and circumstances. In 2026, certain taxable non-employment income-including specified property disposal, rent, interest and royalty income-may be taxed at 15% up to an aggregate 12 VDU (�27,745.80), with amounts above the statutory threshold becoming subject to the 20%, 25% and 32% progression rules. Dividends are taxed at 15% regardless of amount under the current individual-rate rules.

Withholding Tax and Payments to Non-Residents

Withholding depends on the recipient, income type, domestic exemption and any applicable double-taxation treaty or EU-law relief. For foreign companies receiving Lithuanian-source income without a Lithuanian permanent establishment, the main domestic rules include:

Payment	Indicative domestic treatment in 2026
Dividends paid to a foreign company	17% generally; participation exemption may reduce this to 0% where the statutory 10%/12-month holding conditions and anti-abuse requirements are satisfied
Interest to qualifying EEA / treaty-country entities	Generally exempt under the domestic rule described by VMI
Other covered interest and royalties	10% in the cases specified by law
Certain Lithuanian-source income such as qualifying real-estate disposals, performers/sports activities and supervisory-board payments	17%

A double-taxation treaty or an EU directive may provide a lower rate or exemption. Treaty eligibility, beneficial ownership and documentation requirements should be checked before applying a reduced withholding rate.

Tax Residence and Taxable Income

Lithuanian residents are generally taxed on income within the scope of Lithuanian personal income tax rules, including foreign-source income where applicable, while non-residents are generally taxed on specified Lithuanian-source income. Residence is determined under the statutory tests and relevant double-taxation treaties; physical presence is one factor, but it should not be treated as the only test.

Practical point: the older page treated a simple 183-day test as if it were conclusive. Current residence determinations can involve several statutory criteria and treaty tie-breaker rules, so cross-border cases should be checked against the current VMI guidance and the applicable treaty.

Tax Period, Returns and Payments

The tax year for individuals is generally the calendar year. Depending on the type of income, tax may be withheld when paid or declared by the recipient. Lithuania continues to distinguish income for reporting and payment purposes according to the applicable payer/recipient obligations. Annual personal income declarations are filed where required under VMI rules.

For companies, the normal tax period is the calendar year, although another tax period may be approved by the tax administrator where the taxpayer's activities justify it. Filing and payment deadlines differ by tax and taxpayer type, so current VMI deadlines should be checked for the relevant return.

Official Lithuania Tax Resources

Note: This page is a general tax-rate overview, not individualized tax advice. Tax treatment can depend on income classification, residency, legal form, deductions, exemptions, treaty provisions and other facts.