Lithuania

The standard CIT rate is 15% (16% from 1 January 2025). However, small companies and agricultural companies can apply a reduced CIT rate of 0% or 5% (0% or 6% from 1 January 2025) if certain conditions are met. A new amendment to the Law on CIT entered into force on 1 July 2022, which ensured that an increased CIT rate of 20% (15% and additional 5%; 21% [16% and additional 5%] from 1 January 2025) is applied on taxable profits of credit institutions exceeding the threshold of EUR 2 million for an indefinite period (previously, it was applicable only for a limited time period, starting from 1 January 2020 and ending with 2022). Special rules for calculation of taxable profit apply.

Generally, CIT is applied on taxable income received by a Lithuanian tax resident from its local and worldwide activities. Taxable income is calculated by reducing general income of a certain tax period with deductible expenses and non-taxable income.

Income of a tax resident company is not subject to taxation in Lithuania if it was received from activities through a PE in a foreign country that is in the European Economic Area or that has a double tax treaty (DTT) with Lithuania and if the income was subject to taxation there.

Furthermore, CIT may be reduced or even not applied if foreign-sourced income received not through a PE is taxed with a withholding tax (WHT) in a foreign country and this country has a DTT with Lithuania.

Non-resident companies are generally taxed on Lithuania-sourced income received through a local PE and reduced by deductible expenses or on income subject to WHT in Lithuania.

Reduced CIT rate for small companies

Entities with fewer than ten employees and less than EUR 300,000 in gross annual revenues can benefit from a reduced CIT rate of 0% for the first year of operations and 5% (6% from 1 January 2025) for the following periods if certain conditions are met.

CIT regime for certain maritime activities

The rate of CIT on certain maritime activities is 15% (16% from 1 January 2025), with the base set by reference to the functional capacity of the ship. This fixed CIT may be applied to maritime entities that fulfil certain conditions indicated in the law. An election must be made to the tax authorities to apply this regime.

Local income taxes

There is no local or municipal CIT in Lithuania.