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The various tax rates

Companies are taxed in Lithuania at a rate of 15% of their income. Nevertheless, there is a special regime for small business. In effect, companies with an annual income of no more than 500,000 LTL and with fewer than 10 employees are taxed at only 5%. It is also possible to deduct from taxes payable profits on the sale of shares or the shares of of a European company, insurance payments, penalties and fines, depreciation and maintenance of capital assets, business travel, advertising, recreation and unrecoverable debts.

VAT is the Lithuanian consumer tax and it is set at 21% in general, 9% for construction works, 5% for medical, cultural and sporting products and 0% for exports, insurance and transportation related to exports, and health, education and financial expenditure.

Income tax Tax on the income from dividends and other profit
15% 20%

 

Life insurance premiums, contributions to pension funds in a EU country, mortgage interest and university fees (for residents of the country) are all tax-deductible. There has been a double taxation agreement exists between France and Lithuania since 1997.

Links:
National tax inspectorate

Accounting essentials

In their accounting, Lithuanian companies must meet the Lithuanian accounting and trade standards. Listed companies must observe the European Union’s International Financial Reporting Standards. The fiscal year runs from 1 January to 31 December.

A company’s accounts must be kept on paper (a printed copy must be made if done on a computer), written in Lithuanian and amounts expressed in Litas. They must include a balance sheet, a profit and loss account and a statement of cash flow and transactions in the company’s own shares. Verification of the financial health of a business is required under the Corporations Act.

Links:
Corporations Act
Lithuanian Chamber of Auditors
Companies Register Office

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