Personal Income Tax 2026 – Lithuania
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).
Personal 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).
Progressive Rates 2026
Approximately up to €82,962 annual combined income. Includes salary, self-employment, royalties, and other income. Expected average monthly salary €2,312 for 2026.
Approximately €82,962-€138,270. New middle tier introduced 2026. Income in this range taxed at 25%. Increases tax for higher earners.
Above approximately €138,270. Top rate unchanged from previous system. When reaching this threshold, social contributions also reduce.
Non-Taxable Income (NPD)
For those earning minimum wage €1,153 or less. Calculated monthly. Unchanged from 2025 for second year.
NPD calculated only for monthly income up to €2,677. Above this, no NPD. From 2026, simplified formula - only one calculation method.
Separate 15% Rate Income
Excluded from progressive taxation. Taxed separately at 15%. Except small business dividends over €50,000 - included in progressive rates.
Assets held over 5 years: shares, property (non-main residence). Taxed at 15%, excluded from progressive calculation. Property held 5+ years may be exempt.
Certain social insurance benefits, life insurance payouts, pension withdrawals from qualifying accounts. Separate from progressive system.
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