Business Taxation — Lithuania
Corporate tax rate increased to 16% from 2026. Startups get preferential 0%/7% rates. Investment Account scheme for deferring investment taxes. Group taxation regime.
Business Taxation
Corporate tax rate increased to 16% from 2026. Startups get preferential 0%/7% rates. Investment Account scheme for deferring investment taxes. Group taxation regime.
Corporate Income Tax 2026
Increased from 15% in 2026 as part of defense budget funding reform. Applies to all taxable profits of Lithuanian entities and foreign permanent establishments.
Entities with under 10 employees and revenue under €300,000: 0% tax in first tax period. Significant advantage for new businesses.
After first period, preferential 7% rate continues if still meeting employee/revenue criteria. Substantial savings vs 16% standard rate.
Group Taxation
Tax losses can be transferred between entities within same group. Requires 2/3+ direct or indirect holding continuously for 2+ years. Must maintain ownership through transfer date.
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Social Insurance (Sodra)
Lithuania's mandatory social insurance system (Sodra) funds pensions, healthcare, unemployment, maternity/paternity benefits. Employee contributions 19.5% plus employer contributions make total burden approximately 21-22%.
02Personal Income Tax 2026
Major reform in 2026: most income types combined into progressive three-tier system (20%/25%/32%). Replaces previous two-tier system. Administered by State Tax Inspectorate (VMI).