--- title: "Taxes in Lithuania for foreigners: the main rates in 2026" description: "2026 Lithuania tax rates for foreigners: 20/25/32% income tax, 19.5% employee Sodra, 15% dividends, 17% profit tax and 21% VAT, plus self-employment rules." url: https://buhalteris.ai/en/taxes-in-lithuania/ markdown: https://buhalteris.ai/en/taxes-in-lithuania.md checked: 2026-11-13 updated: 2026-11-13 publisher: "MB Mažas Startuolis" language: en --- # Taxes in Lithuania for foreigners: the main rates in 2026 > Prepared by MB Mažas Startuolis. Checked 2026-11-13. **What this means for you** In 2026, personal income tax on annual income in Lithuania is 20% up to €83,237.40, 25% up to €138,729.00 and 32% above that, while dividends are taxed separately at 15%. Employees pay 19.5% of gross pay in social and health insurance (22.5% with optional extra 3% pension accumulation), standard VAT is 21%, and standard company profit tax is 17% (7% or 0% when small-company conditions are met). Checked 2026-11-13. In Lithuania, taxes are administered by VMI, the State Tax Inspectorate, and social and health insurance contributions are collected by Sodra, the State Social Insurance Fund. The table below summarises the main 2026 rates before each topic is explained in detail. | Tax | Who pays | 2026 rate | | --- | --- | --- | | Personal income tax | Individuals on annual income (employers withhold 20% monthly from salary) | 20% up to €83,237.40; 25% up to €138,729.00; 32% above | | Dividends | Shareholders (withheld by a Lithuanian company) | 15% (a tax treaty may lower it for non-residents) | | Employee Sodra contributions | Employees (plus employer contribution) | 19.5% employee (22.5% with extra 3% pension); 1.77% employer on an open-ended contract | | Individual activity | Self-employed individuals | Effective 5%–20% income tax up to €42,500.00 profit (20/25/32% above); 12.52% + 6.98% Sodra on 90% of profit | | Company profit tax | Lithuanian companies | 17% standard; 7% or 0% if VMI conditions are met | | VAT | VAT-registered suppliers (mandatory above €45,000.00 in Lithuania) | 21% standard; 12% and 5% reduced | ## Personal income tax (GPM) GPM is Lithuania’s personal income tax. In 2026, annual income is taxed in three bands tied to VDU, the average monthly wage: - **20%** up to 36 times VDU (€83,237.40); - **25%** above 36 times VDU and up to 60 times VDU (€138,729.00); - **32%** above 60 times VDU (€138,729.00). Employers withhold 20% monthly from your salary minus NPD, the tax-free amount. Any 25% or 32% tax is settled in the [annual tax return](https://buhalteris.ai/en/tax-return-lithuania/). To check monthly pay, use the [salary calculator](https://buhalteris.ai/en/salary-calculator/). ## Dividends Dividends are taxed at 15% GPM. When a Lithuanian company pays dividends, it withholds the tax. Dividends do not count toward the 20%, 25% and 32% annual GPM bands. For non-residents, a tax treaty may lower the rate. ## Employee Sodra contributions Employee Sodra contributions are 19.5% of gross pay. That consists of 12.52% for VSD, state social insurance, and 6.98% for PSD, compulsory health insurance. With the optional extra 3% pension accumulation, the employee rate is 22.5% of gross pay. Separately, the employer pays 1.77% on an open-ended contract. ## Self-employed (individual activity) For self-employed individual activity, annual profit up to €42,500.00 gets an income tax credit. That gives an effective GPM rate of 5% on profit up to €20,000.00, rising to 20% at €42,500.00. Above €42,500.00, there is no credit and the 20%, 25% and 32% bands apply. You also pay Sodra contributions of 12.52% VSD and 6.98% PSD on 90% of profit. See the [individual activity tax guide](https://buhalteris.ai/en/individual-activity-tax/), the [Sodra and PSD guide](https://buhalteris.ai/en/sodra-psd-self-employed/) and the [individual activity tax calculator](https://buhalteris.ai/en/individual-activity-tax-calculator/). ## Company profit tax (MB and UAB) Companies such as an MB, a small partnership, or a UAB, a private limited company, pay profit tax at these rates from 2026: - **17%** standard rate; - **7%** if income for the tax period does not exceed €300,000.00 and VMI’s other conditions are met; - **0%** for the first two tax periods only under VMI’s conditions: income up to €300,000.00 in each period, only natural persons own it, and over three consecutive periods, including the first two, its activity is not suspended, it is not liquidated or reorganised, and no shares pass to new owners. Some other conditions also apply. Compare working as self-employed with running a company in [individual activity vs MB vs UAB](https://buhalteris.ai/en/individual-activity-vs-mb-vs-uab/). ## VAT (PVM) PVM is Lithuania’s value-added tax (VAT). The 2026 rates are: - **21%** standard rate; - **12%** reduced rate from 2026-01-01 for tourist accommodation, regular passenger transport, and arts and culture events; - **5%** reduced rate for items such as medicines, periodicals and, from 2026, books. VAT registration becomes mandatory once VAT-taxable supplies in Lithuania exceed €45,000.00 in the current or previous calendar year. Other rules exist for EU distance sales. ## Tax residency Your tax residency decides whether worldwide income is taxed in Lithuania; see [tax residency in the individual activity guide](https://buhalteris.ai/en/individual-activity-tax/#residency) and the [annual tax return guide](https://buhalteris.ai/en/tax-return-lithuania/). ## Help in English - **VMI phone line:** call +370 5 260 5060 and press 9 for consultations in English. - **International House:** VMI specialists also [consult at International House](https://www.vmi.lt/evmi/tax-consultations-at-international-house) in Vilnius and Klaipėda. ## Primary sources VMI, Sodra and other official pages we checked this against. Most are in Lithuanian. 1. [Personal income tax (GPM) rates from 2026 (in Lithuanian)](https://www.vmi.lt/evmi/tarifai-6-str.-1) State Tax Inspectorate (VMI) 2. [How dividends are taxed and who pays income tax (in Lithuanian)](https://www.vmi.lt/evmi/kaip-apmokestinami-gauti-dividendai-ir-kas-turi-sumoketi-pajamu-mokesti-) State Tax Inspectorate (VMI) 3. [Corporate profit tax changes from 2026 (in Lithuanian)](https://www.vmi.lt/evmi/5724) State Tax Inspectorate (VMI) 4. [VAT (PVM) rates (in Lithuanian)](https://www.vmi.lt/evmi/pvm-tarifai) State Tax Inspectorate (VMI) 5. [Reduced 12% VAT rate (in Lithuanian)](https://www.vmi.lt/evmi/lengvatinis-12-proc.-pvm-tarifas-19-str.-) State Tax Inspectorate (VMI) 6. [Individual activity income tax changes from 2026 (in Lithuanian)](https://www.vmi.lt/evmi/5725) State Tax Inspectorate (VMI) 7. [Sodra contribution rates for the self-employed from 2026-01-01 (in Lithuanian)](https://sodra.lt/sodros-imoku-tarifai-taikomi-nuo-2026-m-sausio-1-d-savarankiskai-dirbantiems-asmenims) Sodra (State Social Insurance Fund Board) 8. [Tax consultations at International House](https://www.vmi.lt/evmi/tax-consultations-at-international-house) State Tax Inspectorate (VMI) ## Common questions ### Is Lithuania’s income tax flat? No. In 2026, GPM on annual income is 20% up to €83,237.40 (36 times VDU), 25% up to €138,729.00 (60 times VDU) and 32% above that. Dividends are taxed separately at 15%, and self-employed individual activity profit up to €42,500.00 gets an income tax credit that gives an effective rate of 5% to 20%. ### How does tax residency affect my taxes in Lithuania? Tax residency decides whether worldwide income is taxed in Lithuania. For non-residents receiving dividends from a Lithuanian company, a tax treaty may also lower the 15% dividend tax rate. ### What is the VAT rate in 2026? The standard VAT rate is 21%. Reduced rates are 12% from 2026-01-01 for tourist accommodation, regular passenger transport and arts or culture events, and 5% for items such as medicines, periodicals and, from 2026, books. Registration is mandatory once VAT-taxable supplies in Lithuania exceed €45,000.00 in the current or previous calendar year. ### How are dividends taxed? Dividends are taxed at 15% GPM, and a Lithuanian company withholds the tax when paying them. Dividends do not count toward the 20%, 25% and 32% annual bands, and a tax treaty may lower the rate for non-residents. ### Where can I ask about taxes in English? Call VMI on +370 5 260 5060 and press 9 for consultations in English. VMI specialists also consult at International House in Vilnius and Klaipėda. ## Related pages - [Salary calculator and tax-free amount (NPD)](https://buhalteris.ai/en/salary-calculator/) Work out take-home pay from gross salary and how NPD applies. - [Annual tax return in Lithuania for foreigners](https://buhalteris.ai/en/tax-return-lithuania/) Filing the annual return, deadlines and tax residency. - [Individual activity tax in Lithuania 2026](https://buhalteris.ai/en/individual-activity-tax/) Income tax, Sodra, tax residency and a worked example. - [Individual activity tax calculator](https://buhalteris.ai/en/individual-activity-tax-calculator/) Estimate GPM, VSD and PSD on your individual activity profit. - [Sodra and health insurance (PSD) for the self-employed](https://buhalteris.ai/en/sodra-psd-self-employed/) VSD and PSD rates, minimums and caps in 2026. - [Individual activity vs MB vs UAB](https://buhalteris.ai/en/individual-activity-vs-mb-vs-uab/) Compare taxes across self-employment and a Lithuanian company. --- Source: https://buhalteris.ai/en/taxes-in-lithuania/. General information, not tax advice. Check the primary sources (VMI, Sodra, e-TAR) before you pay.