Individual - Foreign tax relief and tax treaties

Last reviewed - 19 February 2024

Foreign tax relief

Residents are entitled to a relief from double taxation under effective double taxation treaties (DTTs).

According to the domestic legislation, income received by a resident of Lithuania in a foreign country that is an EU member state or with which Lithuania has a valid DTT is tax exempted in Lithuania only if the documentary evidence concerning the income received in that foreign country and the amount of income tax or equivalent tax paid on such income is submitted to the tax authorities.

This rule does not apply for interest, dividends and royalties received. In these cases, tax credit can be taken in Lithuania for PIT (or its equivalent) paid abroad. However, tax credit may not exceed Lithuanian PIT attributable to the income taxed abroad. Also, it cannot be higher than foreseen by the DTT between the two countries (even though the national law may allow taxation at higher rates).

Residents can also deduct the tax actually paid on income sourced in third countries (up to the PIT rate applicable to such income in Lithuania), provided that supporting documentation from a foreign tax administrator is provided to the Lithuanian tax authorities.

Tax treaties

See the Withholding taxes section in the Corporate tax summary for a list of countries with which Lithuania has a DTT.