Tax Card 2015: Personal income tax in Lithuania

Structure

Personal income tax is imposed on income acquired by a natural person, and it consists of:

• income from employment;
• business income (self-employed income);
• gains from transfer of property;
• rent and royalties;
• interest;
• dividends;
• pensions, scholarships and grants, benefits, awards and gambling winnings;
• insurance indemnities and payments from pension funds;
• other income.

Taxpayers

Personal income tax is paid by natural persons:

• domestic taxpayers (residents) who have obtained income in the Republic of Lithuania and/or foreign states during the taxation period;
• foreign taxpayers (non-residents) who have obtained income in the Republic of Lithuania during the taxation period. 

Taxable objects

Personal income tax is applied to the domestic tax payer’s amount of the taxable income of the taxation period. The object of the salary tax shall be the monthly taxable income of the tax payer.

The taxable income of the foreign taxpayer (non-resident) is employment income, income from professional activities, income from the professional activities of artists, sportsmen or trainers, royalties etc.

Tax rate in Lithuania

The tax rate is 15%.  In certain cases income tax rate 5% applies. To get more information on reduced tax rates, please contact Gencs Valters Law Firm.

Tax is calculated and paid into the budget:

• Generally, personal income tax from employment income is computed and paid by the employer;
• Legal person paying moneys to natural person is obliged to calculate, withhold and pay personal income tax on natural persons behalf

Income tax from A class income must be withheld and paid to the budget before the 15^th day of a respective month if the last portion of income was paid out before the 15^th day of this month; or before the last day of a respective month if the last portion of income was paid before the last day of this month.

Income tax from B class income must be computed and paid to the budget:

• by a Lithuanian tax resident himself  before the 1^st May of the following calendar year;
• by non-tax resident himself in 25 days after receiving the income.

Tax declarations

Monthly tax declarations in respect of A class income must be submitted by tax withholding person by the 15^th day of the following month. Annual tax declarations in respect of A class income must be submitted by tax withholding person by the 15^th February of the following calendar year. A Lithuanian tax resident who received A or B class income must submit annual tax declaration by the 1^st May of the following calendar year. A non-tax resident must submit income tax declaration in 25 days after receiving the income. Additionally, a non-tax resident may submit annual tax declaration by the 1^st May of the following calendar year. The State Taxes Inspection verifies the reliability and correctness of the data presented in the declaration, performs control of the payment of personal income tax and completeness and correctness of the income and expenditure.

Tax relief

The tax payer has a right to not submit the annual tax declaration if he/she:

• is not going to use the right to deduct annual tax exempt amount or additional tax exempt amount, and
• is not going to use the right to deduct expenses from income, and
• during the taxable period received only A class income which is related to employment relations.

The mentioned conditions are applicable to cases established in PIT Law.

Budgetary Competence

The amounts of the tax are included into the State basic budget according to the allocation specified in the Annual State Budget Law. Tax payers have a right to allocate up to 2% of the personal income tax to charity recipients (persons and institutions).

Taxation treaties

In Republic of Lithuania are in force and are applied Taxation treaties with 55 countries.

For full TAX CARD 2015: Personal tax in Baltics click below: