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Corporate Tax in Lithuania

Corporate Tax in Lithuania

The corporate tax is a direct levy applied to companies in Lithuania, which is why it is one of the most important taxes in this country. This tax is applied on the global income generated by a local company and only on the profits generated in Lithuania when it comes to foreign companies undertaking activities here.

Foreign investors who want to open companies here and need assistance can rely on our company formation agents in Lithuania who can also explain how the corporate tax in levied.

The taxable income of companies in Lithuania

The Lithuanian corporate tax is made up of several elements, meaning that the taxable base is divided into several types of incomes levied at different rates, as seen in the table below:

Type of incomeRate
Company profits15%
Capital gains15% or 10%
Passive income15%
Capital duty0%
Payroll0%
Dividends15%

The taxation of capital gains can be reduced under Lithuania’s double taxation agreements. Our Lithuanian company formation advisors can explain how the avoidance of double taxation occurs here.

Reduced corporate tax rates in Lithuania

The are several types of business entities which can be registered in Lithuania and which will be levied with the local corporate tax. These are:

  • – the limited liability company which can be private or public and which are subject to different share capital requirements;
  • – micro-enterprises which can also be registered as limited liability companies, but are subject to other taxation criteria;
  • – subsidiaries and branch offices which can be registered by foreign companies interested in having a presence in Lithuania;
  • – partnerships which can be general or limited and which will be taxed under the personal income tax.

Out of these, micro-enterprises benefit from a reduced corporate tax rate of 5%. In order to qualify for this reduced tax rate, a Lithuanian company must have a maximum number of 10 employees and an annual turnover of maximum 300,000 euros. Maritime companies can also benefit from special tax rates applicable on the corporate income.

For full information on how the company tax is applied in this country and for assistance in registering a business here, please contact our company registration consultants in Lithuania.