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
Up to €83,237 annual combined income (36 × €2,312.15). Includes salary, self-employment, royalties, and other income. Average monthly salary (VDU) for 2026 is €2,312.15.
€83,237-€138,729. New middle tier introduced 2026. Income in this range taxed at 25%. Increases tax for higher earners.
Above €138,729. 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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Sodra Lithuania 2026: Social Insurance Rates 19.5% and Cap
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%.
03Business Taxation
Corporate tax rate increased to 17% from 2026. Startups get preferential 0%/7% rates. Investment Account scheme for deferring investment taxes. Group taxation regime.