Worldwide income received by a Lithuanian tax resident is subject to PIT. However, only the following income sourced in Lithuania by a non-resident is subject to PIT:
- Employment-related income or income arising from substantially similar relations.
- Income from distributed profits and payments to the members of the Board or Supervisory Board.
- Interest income, except for interest received on government non-equity securities.
- Income from sports activities, including income directly or indirectly related to those activities irrespective of whether the payment is made directly to the sportsman concerned or a third party acting on behalf of and for that sportsman.
- Income from performing activities, including income directly or indirectly related to those activities irrespective of whether the payment is made directly to the performing artist concerned or a third party acting on behalf of and for that performing artist.
- Income from the lease of immovable property located in Lithuania.
- Income from the sale or transfer of movable property if that object is subject to legal registration in accordance with the local regulations and such object is (or must be) registered in Lithuania, as well as income from the sale of immovable property located in Lithuania.
- Income derived from individual activities carried out through a fixed base, as well as income earned abroad that is attributed to that fixed base in Lithuania, where the said income is related to the activities of a non-resident through the fixed base in Lithuania.
- Compensation for copyright infringement.
Personal income tax rates
PIT at a 20% rate is applied to income amounts not exceeding 136,344 euros (EUR) per calendar year in 2019 (this threshold is foreseen to be reduced for 2020 and 2021) and at a 27% rate for the exceeding part for:
- employment-related income
- payments to the members of the Board or Supervisory Board
- income derived under copyright agreements (when it is received from the company that is also the employer of individual), and
- income under civil agreement received by a manager of small partnership who is not a member of such small partnership.
Income from profit distribution (e.g. dividends) is taxable at a flat PIT rate of 15%.
Individual activity income is taxed depending on the amount of income received. PIT calculated at the 15% flat rate on taxable income is reduced by applying a PIT credit, calculated according to special formulas. Therefore:
- A 5% rate applies if income does not exceed EUR 20,000 per calendar year.
- A proportionally increasing rate ranging from 5% to 15% applies to income exceeding EUR 20,000 but lower than EUR 35,000 received per calendar year.
- The 15% flat PIT rate is applied to the income amount of EUR 35,000 and higher received per calendar year.
Income under a business certificate (including certain rental income) can be received if it does not exceed the limit of EUR 45,000; the excess is taxed at a flat PIT rate of 15%.
Other income not specified above is taxed at a PIT rate of 15% if income amounts do not exceed EUR 136,344 per calendar year. A 20% PIT rate is applicable to income exceeding this threshold. No decrease of this threshold is foreseen.
Local, state, or provincial PIT rates
There are no local, state, or provincial PIT rates applicable in Lithuania.