Lithuania - Tax Guide for Freelance Contractors
Welcome to our guide to Lithuanian Taxation. You will find a wealth of information which will be useful if you plan to work in, or place consultants in, Lithuania.
Our tax guides give a general overview of the actual taxation rates and rules at the time of writing. There are of course many ways to legally reduce tax or social security burdens in Lithuania. Please contact us for more information or an actual breakdown of your situation, and to find out more about our range of payroll and contact management services in Lithuania.
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Lithuanian Income Tax
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Tax residents in Lithuania: are liable for income tax in Lithuania on their worldwide income;
Non tax residents in Lithuania: are liable for tax on their Lithuanian-source income and income derived from activities through a fixed base in Lithuania, including foreign-source income attributed to that fixed base.
Individuals will be regarded as tax residents:
- if their permanent place of residence is in Lithuania during the tax period,
- if their centre of personal and economic interests is in Lithuania,
- if they are present in Lithuania for at least 183 days during the tax period, or
- if they are present in Lithuania for at least 280 days in 2 consecutive tax periods and have stayed in Lithuania for at least 90 days in one of those periods.
Married persons are taxed separately.
Taxable income includes:
- employment income,
- income from individual commercial activities,
- income from the leasing of assets and other qualifying income.
Certain deductions are permissible for 2012 including:
- an annual tax allowance of LTL 5’640 is applicable if annual income does not exceed LTL 9’600,
- the annual tax exemption is reduced accordingly for annual income between LTL 9’600 and LTL 37’800,
- no annual tax exemption is applicable if the annual income exceeds LTL 37’800,
- an additional tax allowance of LTL 100 per month for the first child and LTL 200 for the second child and any subsequent children,
- deductions are available for the costs of life insurance, pensions funds and vocational training or study (subject to certain limitations).
Income tax rates for 2012:
- 15.00% standard tax rate for personal income.
By May 1st, following the end of the taxable year.