Tax Guide Lithuania 2026: What Every Investor Needs to Know

Lithuania remains one of the more attractive tax environments in the Baltic region for employees, investors, and expats. The country applies progressive personal income tax rates ranging from 20% to 32% from 2026, while dividend income is generally taxed at 15% and no general net wealth tax has been identified in current legislation (VMI, 2026; IMF, 2025).

For investors, Lithuania combines relatively moderate investment taxation with a residence-based tax system. Tax residents are generally taxed on worldwide income, while non-residents are taxed only on Lithuanian-source income (VMI, 2026).

Tax Overview — Key Numbers at a Glance

Tax Type	Rate	Notes
Income Tax	20% / 25% / 32%	Progressive PIT system from 2026 (TaxRavens, 2026; Rödl, 2026)
Capital Gains Tax	15% / 20%*	Investment gains above applicable thresholds
Dividend Tax	15%	Individual taxpayers (VMI, 2026)
Interest Income Tax	15%	Taxable interest income (VMI, 2026)
VAT (Standard Rate)	21%	Standard VAT rate
Reduced VAT Rates	5%, 12%	Effective from 2026
Employee Social Contributions	19.5%	Standard employee contribution
Employer Social Contributions	1.77%**	May vary depending on employee category
Corporate Income Tax	17%	Standard rate from 2026
Local Tax / Surtax	None identified	No municipal income surtax identified
Property Tax	Applicable	Rates depend on property type and valuation
Inheritance Tax	See section below	Rules require individual verification
Wealth Tax	None identified	No general net wealth tax
Tax Year	Calendar Year	Standard reporting period
Filing Deadline	1 May	Following the tax year
Tax Authority	State Tax Inspectorate (VMI)	Lithuanian tax authority

• Practical guidance sources indicate 15% and 20% rates for investment gains, but investors should verify current thresholds directly with VMI.

** Certain employer contribution rates vary depending on employee category and social-insurance classification.

Tax Residency in Lithuania

Lithuania operates a residence-based tax system. Individuals who become Lithuanian tax residents are generally taxed on worldwide income, including foreign dividends, foreign interest income, foreign employment income, and gains from foreign investments (VMI, 2026).

A person may become a Lithuanian tax resident if:

• They spend 183 days or more in Lithuania during a tax year (VMI, 2026).
• Their permanent home is located in Lithuania.
• Their personal, economic, or social interests are primarily located in Lithuania (VMI, 2026).
• Other statutory residency tests under Lithuanian tax law apply.

Non-residents are generally taxed only on Lithuanian-source income (VMI, 2026).

Lithuania maintains an extensive network of double-taxation treaties that may reduce double taxation on foreign investment income and foreign employment income (VMI, 2026).

Income Tax in Lithuania

Lithuania introduced a revised progressive personal income tax structure from 1 January 2026 (TaxRavens, 2026; Work in Lithuania, 2026).

Current rates are:

• 20% on lower income bands
• 25% on middle-income bands
• 32% on higher-income bands

Recent tax-reform materials indicate thresholds linked to average monthly salaries, corresponding approximately to:

• Up to €82,962 annually: 20%
• €82,962–€138,270 annually: 25%
• Above €138,270 annually: 32%

Because the thresholds are linked to average salaries, they may be updated periodically.

The reviewed source material did not provide sufficiently clear official confirmation of the precise 2026 non-taxable allowance formula. For this reason, no specific personal allowance amount is stated here.

Example

An employee earning €60,000 annually would generally remain within the lowest personal income tax band and be subject to the applicable 20% PIT rate in addition to mandatory social-security and health-insurance contributions.

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Capital Gains Tax — How Lithuania Taxes Investment Income

Tax on Stocks and ETFs

Lithuanian tax residents are generally required to report gains arising from the sale of:

• Shares
• ETFs
• Investment funds
• Other financial assets

Recent practical guidance indicates that capital gains are generally taxed at:

• 15% for most investors
• 20% once gains exceed higher-income thresholds linked to average salaries

Investors should verify the applicable thresholds directly with VMI because investment-income taxation continues to evolve under the 2026 reforms.

Some secondary sources report a €500 annual exemption for gains from certain financial assets, including shares. However, investors should verify current eligibility requirements and limitations directly with VMI before relying on this exemption.

No current official guidance reviewed for this article confirms a general holding-period exemption for listed shares. Investors should therefore assume gains remain taxable unless a specific exemption clearly applies.

The reviewed sources also do not clearly confirm a securities-loss carry-forward mechanism. Investors should avoid assuming unused losses may be carried forward without direct confirmation from VMI.

Accumulating vs Distributing ETFs

No separate Lithuanian ETF tax regime was identified in the reviewed materials.

For practical purposes:

• ETF sale gains generally appear to be taxed under the same rules that apply to shares and other financial assets.
• ETF distributions generally appear to be treated similarly to dividend income.

Accumulating ETFs

No separate Lithuanian deemed-taxation regime for accumulating ETFs was identified in the reviewed sources.

In practice, gains appear to be reported when ETF units are sold, but investors should verify current treatment directly with VMI.

Distributing ETFs

ETF distributions generally appear to be treated similarly to dividend income.

UCITS ETFs

No separate tax rate for UCITS ETFs was identified in the reviewed materials.

Dividend Tax and Withholding

Dividends received by individuals are generally taxed at 15% (VMI, 2026).

Where dividends are paid by Lithuanian companies, tax is generally withheld before payment and remitted to the tax authorities.

Foreign dividends received by Lithuanian tax residents are also taxable and generally must be reported through the annual tax declaration process (VMI, 2026).

Where foreign withholding tax has already been paid, Lithuania’s double-taxation treaties may help reduce double taxation, subject to treaty conditions and documentary requirements.

How to Report Investment Income in Lithuania

Lithuanian tax residents are generally required to report taxable investment income through the annual personal income tax declaration process (VMI, 2026).

Step 1: Collect Broker Statements

Gather annual tax statements and transaction reports from all brokers and financial institutions, including:

• Interactive Brokers
• DEGIRO
• Trading 212
• eToro
• Saxo Bank
• Lithuanian banks and brokers

Investors should also retain dividend statements, interest-income reports, and evidence of any foreign withholding taxes paid.

Step 2: Calculate Investment Income

Calculate separately:

• Capital gains from asset sales
• Capital losses
• Dividend income
• Interest income
• Other taxable investment income

Foreign investment income should generally be converted and reported according to Lithuanian tax-reporting requirements (VMI, 2026).

Step 3: Complete the Annual Declaration

Lithuania provides electronic filing through the VMI online tax system.

Some practical tax guides refer to Form GPM311 for reporting investment income. However, investors should verify the current declaration form and reporting codes directly within the VMI filing portal because forms and filing procedures may change over time.

Step 4: Submit the Return

Submit the annual declaration before the applicable filing deadline.

Step 5: Pay Taxes Due

Any tax due is generally payable by 1 May following the end of the tax year (VMI guidance; Waltio Lithuania Tax Guide, 2026).

Investors should keep records supporting:

• Purchase prices
• Sale prices
• Dividend receipts
• Interest payments
• Foreign withholding taxes
• Broker statements

Tax Treatment of Foreign Investments

Lithuanian tax residents are generally taxed on worldwide income. As a result, investment income earned through foreign brokers and foreign financial institutions is usually reportable in Lithuania (VMI, 2026).

Foreign Brokers

The reviewed materials identified no special Lithuania-specific registration requirements for retail investors using foreign brokers such as:

• Interactive Brokers
• DEGIRO
• Trading 212
• eToro
• Saxo Bank

Instead, the primary compliance obligation is accurate reporting of taxable income through the annual declaration process.

Foreign ETFs

Foreign ETFs generally appear to be taxed under the same rules that apply to domestic ETFs and shares.

No separate Lithuanian tax regime for foreign UCITS ETFs was identified in the reviewed sources.

Foreign Dividends

Foreign dividends are generally taxable for Lithuanian tax residents and must normally be included in annual reporting (VMI, 2026).

Where foreign withholding tax has already been deducted, treaty relief may reduce additional Lithuanian tax liabilities, subject to documentation requirements.

Foreign Interest Income

Foreign interest income is generally taxable unless a specific exemption applies (VMI, 2026).

Currency Conversion

Investors should maintain accurate records of exchange rates and transaction values when reporting foreign investment income.

Because reporting requirements may change, investors should consult current VMI guidance before filing.

Other Important Taxes in Lithuania

VAT — Value Added Tax

Lithuania applies a standard VAT rate of 21% (Seimas, 2026).

Reduced VAT rates of 5% and 12% apply to certain categories from 2026.

Examples include:

• Certain books and publications: 5%
• Accommodation services: 12%
• Certain passenger transport services: 12%
• Selected cultural services: 12%

Property Taxes

Property taxation exists in Lithuania.

However, the reviewed source material did not provide sufficiently verified official information regarding:

• Current municipal property-tax rates
• Valuation methods
• Exemptions
• Rate bands

For this reason, investors should verify current property-tax obligations directly with VMI or local authorities before purchasing property.

Inheritance and Gift Taxes

The reviewed research materials did not provide sufficiently current official confirmation regarding:

• Inheritance-tax rates
• Gift-tax rates
• Exemptions
• Family-transfer rules

Because reliable verification was not available, investors should consult current VMI guidance or professional advice before relying on inheritance or gift-tax assumptions.

Wealth Taxes

No general annual net wealth tax was identified in the reviewed sources (IMF, 2025).

Local Taxes

No separate municipal income tax, church tax, or regional income surtax was identified in the reviewed materials.

Tax Advantages and Tax-Efficient Accounts

Lithuania’s most significant tax-related long-term savings arrangement is the second-pillar pension system.

According to reviewed pension and payroll guidance:

• Employees may contribute approximately 2.7–3%.
• The state provides an additional contribution linked to average salary levels.
• Various reforms have increased flexibility regarding participation and withdrawals.

No ISA-style, ISK-style, or similarly broad tax-sheltered retail investment account was identified in the reviewed materials.

Investors should therefore generally assume that ordinary brokerage accounts remain subject to standard Lithuanian taxation rules.

Compare Taxes Across Europe

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Key Deadlines and Important Dates

• Tax year: Calendar year (VMI, 2026)
• Filing deadline: 1 May following the tax year (Waltio, 2026)
• Payment deadline: 1 May following the tax year (Waltio, 2026)
• Online filing deadline: Generally aligned with annual filing deadline
• Estimated tax deadlines: No verified schedule identified
• Extension deadlines: No verified extension rule identified
• Broker annual statements: Usually available during the first quarter of the following year, depending on the broker

Common Tax Mistakes Investors Make

Lithuanian investors commonly encounter reporting problems when dealing with foreign investment income.

Examples include:

• Forgetting to report foreign dividends
• Omitting foreign interest income
• Incorrectly calculating ETF gains
• Missing filing deadlines
• Assuming accumulating ETFs are tax-exempt
• Failing to keep evidence of foreign withholding taxes
• Misreporting income from Interactive Brokers, DEGIRO, Trading 212, eToro, or Saxo Bank accounts
• Assuming foreign brokers automatically report all income to Lithuanian tax authorities

Maintaining accurate transaction records throughout the year can significantly reduce reporting errors.

Is Lithuania Tax-Efficient for Investors?

Advantages

• Moderate dividend tax rate of 15%.
• No general net wealth tax identified.
• No separate ETF taxation regime identified.
• Extensive double-tax treaty network.
• Competitive investment-tax environment relative to many EU countries.

Disadvantages

• Worldwide-income taxation applies to residents.
• Investment income reporting remains the investor’s responsibility.
• Property-tax rules can require additional verification.
• Certain investment-tax rules remain subject to interpretation where official guidance is limited.

Suitable Investor Types

Lithuania may be particularly suitable for:

• Long-term ETF investors
• Dividend investors
• Expats
• Remote workers
• Professionals relocating within the EU
• Investors seeking a relatively straightforward tax system

Related Resources

Tax Tools

• Capital Gains Tax Calculator
• ETF Tax Calculator
• Dividend Tax Calculator
• Net Salary Calculator

Investing Guides

• Investing in Lithuania
• Best Brokers in Lithuania

Country Guides

• Cost of Living in Lithuania
• Average Salary in Lithuania

Comparison Tools

• EU Tax Comparison Map
• Cost of Living Comparison Tool
• Net Salary Calculator

Disclaimer

This article is for general informational and educational purposes only and does not constitute tax, legal, accounting or investment advice. Tax rules may change and their application depends on individual circumstances. Always verify current requirements with the relevant tax authority or consult a qualified tax adviser before making financial or investment decisions.

Lithuania tax guide

Sources & References

EU regulations & taxation

• Deklaravimas.vmi.lt — VMI online tax system
• E-seimas.lrs.lt — progressive personal income tax rates
• State Tax Inspectorate (VMI)
• European Commission / Taxation & Customs — exchange rates
• foreign UCITS ETFs
• Inheritance-tax rates
• residence-based tax system
• Oecd.org — double-taxation treaties
• foreign brokers

Additional educational resources

• E-seimas.lrs.lt — standard VAT rate