Taxation in Lithuania

TaxesDescription
Corporate Income Tax (CIT) 
The standard CIT rate is 15%. 

Generally, CIT is applied on taxable income received by a Lithuanian tax resident from its local and worldwide activities. Taxable income is calculated by reducing the general income of a certain tax period with deductible expenses and non-taxable income. 

Small companies can apply a reduced CIT rate of 0% or 5% if certain conditions are met. 
Dividend Taxation
Dividends are exempt from CIT if the parent company holds at least 10% of the subsidiary for at least 12 months (the exemption is not applicable on dividends paid to offshore companies and is subject to anti-avoidance provisions). 

In other cases – 15%. 
Withholding Taxes (WHT)
Generally, the income of a foreign entity in Lithuania not derived through a PE is deemed to be Lithuanian-source income and is subject to withholding at the following rates: 

– Interest on any type of debt obligations, including securities: 10% 
– Royalties: 10% 

0% WHT is applied on royalties paid to related parties meeting requirements of the European Commission (EC) Interest and Royalty Directive. 

Lithuanian WHT on interest paid to entities established in the European Economic AreaEuropean Economic Area or DTT countries is 0%. 
Payroll Taxes
Personal income tax 20% is calculated from the amount not exceeding 84 average wages (60 starting 2021), for the part exceeding – up to 32%; mandatory social insurance contribution varies from 21.29% to 24.29%.

This page was last updated on January 13, 2022.