Page 34 - Mazars Central and Eastern European tax guide 2023

Lithuania The general rate is 21%, the reduced rates are 9% (e.g., Other income (e.g., interest, royalties, capital gains,
rental income) is taxable at a PIT rate of 15% in case such
books, central heating, public transportation, tourist
accommodation and catering [until 31 December 2023], income does not exceed EUR 202,188 per calendar year
cultural and sports activities [until 30 June 2023], the in 2023. PIT at the rate of 20% is applied to amounts that
activities of performers, such as singers, actors, etc. exceed this.
[until 30 June 2023] and 5% [e.g. medicine, journals,
Persense Tax UAB newspapers, and technical aids for the disabled]). Income in general is recognized at the moment of its
Lvivo str. 25, Vilnius, The options/limits based on the EU Directive are presented actual receipt.
Lithuania within the VAT legislation. The gross salary of employee is also subject to social
Phone: +370 615 44 719 contributions at a rate of 19.5%, and the employer
www.persense.lt Other types of indirect tax in Lithuania include excise duty, is required to deduct this tax. The employer also
the environmental protection charge and data storage has to pay 1.77% social contributions on top of the
device tax.
employee’s gross salary. An additional 3% contribution
Personal income tax / Social security system may be paid by individuals who have decided
to accumulate an additional pension (the employer
Employment-related income, board member fees, is required to deduct this tax).
Corporate taxes and other direct taxes company to a foreign company. Lithuania has a wide royalties received from an employer, income under a civil
international treaty network with more than 50 double agreement received by a manager of a small partnership Lithuania is subject to EU regulations laying down social
The general rate for corporate income tax is 15% tax treaties. who is a member of the small partnership are taxed at the security principles for persons migrating between
in Lithuania. An incentive corporate income tax rate of 5% rate of 20% in cases where income does not exceed EUR EU Member States.
is applied to small companies with an annual turnover Companies are also subject to two types of taxes 101,094 per calendar year in 2023. PIT at a rate of 32%
up to EUR 300,000 and with no more than 10 employees. on capital: is applied to excess amounts.
Small companies can apply a 0% rate of corporate income • Immovable property tax – tax on property deemed
tax for their first financial year. to be immovable by law and located in Lithuania Income from profit distribution is taxable at a flat PIT
(buildings and constructions, unfinished constructions rate of 15%.
In Lithuania, the ordinary losses incurred may be carried excepted). The annual tax rate varies from 0.5% to 3%
forward to the subsequent taxable periods for an unlimited of the taxable value of immovable property. Tax rates are Wage related taxes in Lithuania Minimum wage Average wage
time, as long as the entity continues the activities that set by municipalities according to the territory where in private sector
generated the losses. The amount of losses carried to the the immovable property is located. The tax period in EUR in EUR
subsequent taxable periods is limited to 70% of taxable is a calendar year.
profit for the corresponding taxable period. The 70% • Land tax – tax on land owned in Lithuania, to be paid 840 1,685
limit does not apply to small companies. Capital losses by both resident and non-resident entities and Total wage cost 855 101.77% 1,715 101.77%
associated with the transfer of derivative financial individuals. The tax rate varies from 0.01% to 4%
instruments and securities may only be carried forward for of the taxable value of the land. Tax rates are set Social contribution tax 15 1.77% 30 1.77%
5 years and can only be covered from future capital gains. Gross salary 840 100.00% 1,685 100.00%
by municipalities and depend on the location of the
Under certain conditions there is no withholding tax land. The tax period is a calendar year. Personal income tax* 43 20.00% 283 20.00%
on dividends, interest and royalty paid by a Lithuanian Employees' social contributions 164 19.50% 329 19.50%
VAT and other indirect taxes
Transfer pricing in Lithuania Net salary 633 75.38% 1,073 63.71%

Arm's length principle ü Since 2004 VAT options in Applicable / limits * Non taxable allowance of EUR 625 (on minimum wage) and EUR 270.14 (on average wage).
Documentation liability ü Since 2004 Lithuania
APA ü Since 2012 EUR 10,000/year; the OSS system
Country-by-Country Since 2016 Distance selling is applicable.
liability ü
Master file-local file Call-off stock ü
(OECD BEPS 13) ü Since 2019
applicable VAT group registration No
Penalty Cash accounting – yearly No, it is an optional regime for
EUR 1,820 – 5,590 amount in EUR (approx.) agricultural producers only.
lack of documentation ü (EUR 3,770 – 6,000 for Import VAT deferment ü
recurrences) Taking over property as a transfer
10% – 50% of contribution to a legal entity;
on tax underpayment taking over a material improvement
(20% - 100% starting from Local reverse charge of a building; supply of certain types
tax shortage ü 1 May 2023) of scrap metal; supply of construction
+ late payment interest; services; supply of mobile phones,
fines can be doubled tablets and laptops (applicable until
31 December 2026).
on recurrent basis.
Option for taxation
Related parties > 25% Direct or indirect control.
letting of real estate ü Jūratė Zarankiené
Safe harbours ü Low value-added services: supply of used real estate ü Managing Partner
5% mark-up
Mobile: +370 658 10 343
Level of attention paid by Tax VAT registration Local taxable person – EUR 45,000 E-mail: jurate.zarankiene@mazars.lt
Authority 9/10 threshold /12 months; Foreign taxable person – No.
34 Mazars Central and Eastern European tax guide 2023 Central and Eastern European tax guide 2023 Mazars 35