Lithuanian Company Taxes: A Beginner’s Guide to What a UAB Pays

A company in Lithuania deals with a handful of taxes, and most of them are not about profit. VAT comes with almost every sale, Sodra contributions and income tax with every salary, and a 15% tax with every dividend. Corporate income tax on the profit itself is only one line in the budget.

This guide walks through all of them, tax by tax, with the rates, the thresholds and the deadlines. It is written for a foreign founder who is weighing a company in Lithuania or has just registered a Lithuanian UAB, and it assumes no prior knowledge of the Lithuanian system. The figures are current as of October 2026.

Taxes a Lithuanian Company Pays at a Glance

The table sums up the taxes in Lithuania for a typical private limited company, the Lithuanian UAB or LLC. The first four reach almost every trading company; the rest depend on what it owns and whom it pays.

Corporate Income Tax: The Short Version

A Lithuanian company pays corporate income tax on its annual profit at 17%. A small company with annual income of €300,000 or less pays 7%. A newly registered small company owned by individuals can even pay nothing for its first two tax periods, if it meets a few conditions. The return is filed once a year and the tax is settled by 15 June. The conditions for the reduced rates, how related companies are counted and what makes a company lose the relief are explained in our guide to corporate income tax in Lithuania.

VAT in Lithuania: Rates, Registration and Monthly Filing

VAT is the tax a trading company meets first. The standard rate is 21%. A 12% rate applies to accommodation, passenger transport and tickets to cultural events, and a 5% rate to books, periodicals and certain medicines. Exports and supplies to VAT-registered customers in other EU countries are zero-rated, while financial, insurance, medical and education services are exempt. The reduced 9% rate that older guides still quote no longer exists.

When VAT Registration Becomes Mandatory

A Lithuanian company may trade without a VAT number while its taxable sales in Lithuania stay at or below €45,000 in the previous calendar year and in the current one. The month the limit is passed, the company registers and starts charging VAT. Two further rules catch small companies with foreign suppliers. Buying goods worth more than €14,000 a year from businesses in other EU countries requires registration whatever the turnover. So does buying services from them, because the company has to account for Lithuanian VAT on those purchases itself.

Voluntary registration is open to any company with a real business purpose, and most foreign-owned companies apply right after company registration in Lithuania. The tax authority checks that the company trades or is about to, so it helps to have a signed contract, an office or a supplier agreement ready when you apply. The application goes through the tax authority’s portal, usually filed by the company’s accountant, and the decision takes three working days once the file is complete.

Returns and the Invoice Register

A VAT-registered company files a return for every calendar month by the 25th of the following month and pays the tax by the same date. The part that surprises founders is a second filing. By the 20th of each month, every VAT payer uploads the details of all invoices it issued and received in the previous month to the invoice register, i.SAF. The tax authority matches sales and purchase invoices between companies automatically, so a missing or mismatched invoice is noticed quickly.

Payroll Taxes in Lithuania: What an Employee Costs

Payroll in Lithuania is unusual in one respect: nearly all of the social contributions come out of the employee’s pay rather than being added on top. The employee gives up 19.5% of gross salary to Sodra, the state social insurance fund, which covers pension, sickness, maternity and health insurance. The company adds only 1.77% on a permanent contract, or 2.49% on a fixed-term one. Income tax is then withheld at 20% after a tax-free allowance, which is €747 a month at the minimum wage, shrinks as pay rises and disappears at about €2,677. The allowance applies only to a Lithuanian tax resident.

These rates have a ceiling and a floor. High earners pay 25% income tax on the part of annual income above about €83,000 and 32% above about €138,700, the level at which Sodra contributions also stop. The floor matters to far more companies. Sodra contributions are calculated on at least the minimum wage of €1,153 a month, even if the actual pay is lower. The only exceptions are employees who are under 24, retired, disabled or work for another employer as well.

This is what a gross salary of €2,000 a month turns into for a resident employee on a permanent contract.

Just over a third of what the company spends on this salary goes to the state. The company reports the month’s contributions to Sodra and the withheld income tax to the tax authority by the 15th of the following month. The contributions are paid by the same date; the income tax is paid in the month the salary goes out.

The Director’s Salary

Every Lithuanian UAB has a director, and a paid director is an employee like any other, so the same contributions and the same floor apply. A part-time director paid €400 a month still costs the company Sodra contributions calculated on €1,153. A director who lives in another EU country and is insured there can be exempt from Sodra with an A1 certificate. The employment contract and the residency question are covered in our guide to the director of a Lithuanian company.

Dividends and Withholding Tax

Once the corporate income tax is paid, the remaining profit can be distributed. The company withholds 15% personal income tax from dividends paid to an individual shareholder, resident or not. For a foreign owner that is the end of the Lithuanian tax, and a double tax treaty may reduce the rate further. Dividends paid to a foreign company carry 17% withholding tax, unless the parent has held at least 10% of the shares for twelve months. In that case nothing is withheld, as long as the parent is not based in a listed tax haven. Dividends are paid from profit shown in approved accounts, which in practice means once a year after the shareholders’ meeting, or mid-year from an interim balance sheet.

Some other payments to foreign businesses carry withholding tax too, although a double tax treaty usually reduces it. Ordinary fees for services, management or consulting do not, which matters to owners who bill their own company from abroad.

Other Taxes: Property, Insurance and Packaging

A few smaller taxes come up more often than owners expect, especially for companies that own property or sell goods.

Lithuania has no stamp duty on contracts or share transfers, no annual company car tax and no tax on a company’s capital. Excise duties concern only companies that produce or import alcohol, tobacco, fuel or sweetened drinks.

Filing Calendar for a Lithuanian Company

Lithuanian taxes are declared through two online systems, EDS for the tax authority and Sodra’s portal for social insurance, and the deadlines spread across the month. A company with one employee and a VAT number has at least four filings a month.

Both systems work in Lithuanian, and filing needs a qualified electronic signature or the accountant’s own access, so almost every foreign-owned company has a local accountant running the calendar. Budget for that fee from the start: it is also the main running cost of a dormant company, because the nil returns still have to be filed.

Setting Up Your Lithuanian Company With Eesti Firma

The tax burden on a company in Lithuania is moderate once it is set up properly: a VAT number from the start, a director’s contract that respects the Sodra floor and an accountant who files on time. We register companies in Lithuania, provide the registered address, prepare the director’s employment contract and advise on how the accounting and tax filings should be organised before the first deadline arrives. If you are still choosing between a new company and a ready-made Lithuanian LLC, send us a short description of your planned business in Lithuania and we will tell you what it will cost in tax.

Send a Request

Frequently Asked Questions