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Lithuania - Other taxes and levies

Lithuania - Other taxes and levies

Taxation of international executives

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Social security tax

Are there social security/social insurance taxes in your country/territory? If so, what are the rates for employers and employees?

Social security and mandatory health insurance contributions are payable in respect of gross employment income by the employer and employee. Income cap for social security contributions on employment income is applicable as of 2019. In 2019 it is EUR136,344. Specific rules are established for self-employed individuals with a cap for contributions applied.

It should be noted, that it is likely that most international assignees would not be liable for Lithuanian social security, as assignees would remain in their home countries/territories’ social security system under the EU regulations which also cover European Economic Area (EEA) countries/territories and Switzerland, or they remain in their home countries/territories’ social security system under a totalization agreement with Lithuania.

The standard rate of social security contributions is 21.27 percent, from which 1.77 percent is employer’s part and 19.5 percent is employee’s part. Additionally 1.8/3 percent is withheld from the gross employment income of an employee participating in certain pension accumulation plans.

As of 1 January 2016 the value of shares exercised under stock options not earlier than after 3 years of grant is not subject to social security contributions in Lithuania. Please be aware that the new rules apply to stock options only (i.e. where after 3 years an employee has an option to acquire shares).

Type of insurance Paid by employer Paid by employee Total
Social security and mandatory health insurance contributions
1.77% 19.5% 21.27%
Optional additional contributions for pension accumulation plan 0% 1.8%/ 3% 1.8%/ 3%
Total 1.77% 19.5%/ 21.3%/ 22.5% 21.27%/ 23.07%/ 24.27%

Pension Plan

No separate payment – included in the general social security contributions.

Employment insurance

No separate payment – included in the general social security contributions.

Gift, wealth, estate, and/or inheritance tax

Are there any gift, wealth, estate, and/or inheritance taxes in your country/territory?

Inheritance tax

Taxable property includes movable assets that have to be legally registered and immovable assets located in the Republic of Lithuania, shares and money.

Tax is not levied on the property inherited from close relatives or when the value of the inherited property does not exceed EUR 3,000.

The rates of inheritance tax are as follows:

  • 5 percent on inherited property, if the taxable value does not exceed EUR150,000,
  • 10 percent on inherited property, if the taxable value exceeds EUR150,000.

Gifts

Gifts from close relatives, gifts not exceeding the value of EUR2,500 are non-taxable. Gifts exceeding the aforementioned value are taxed at 15/20 percent personal income tax rate.

Wealth

There is no wealth tax in Lithuania.

Real estate tax

Are there real estate taxes in your country/territory?

As of 2018 Lithuanian and foreign individuals owning real estate other than that of commercial use in Lithuania are subject to 0.5-2 percent real estate tax on the taxable value exceeding EUR220,000 of the whole real estate owned. An individual non-taxable value of EUR220,000 should be applied for each family member who owns (acquires) immovable property as well as for spouses who own property under joint ownership right) which is included in the list of taxable purposes of real estate (special rules apply).

Commercial property (for purposes other than those subject to the above taxation) owned by individuals is taxed in the same way as real estate owned by legal entities.

Sales/VAT tax

Are there sales and/or value-added taxes in your country/territory?

The standard value-added tax (VAT) rate is 21 percent. There is also a reduced rates of 9 and 5 percent. There are several transactions which are subject to VAT at a rate of 0 percent or are VAT exempt.

Unemployment tax

Are there unemployment taxes in your country/territory?

There are no separate unemployment taxes in Lithuania since such payments form a part of social security contributions.

Other taxes

Are there additional taxes in your country/territory that may be relevant to the general assignee? For example, customs tax, excise tax, stamp tax, and so on.

Custom/ excise tax might be applied on certain imported goods/belongings.

Foreign Financial Assets

Is there a requirement to declare/report offshore assets (e.g. foreign financial accounts, securities) to the country/territory’s fiscal or banking authorities?

Individuals have to report opened and closed accounts in foreign financial institutions to the Lithuanian tax authorities if turnover in any of the accounts is equal or more than EUR15,000 during a calendar year. The deadline for the reporting is 2 May of the following year when the turnover exceeded EUR15,000.

© 2020 "KPMG Baltics", UAB, a Lithuanian limited liability company and a member firm of the KPMG network of independent members firms affiliated with KPMG International Cooperative ("KPMG International") a Swiss entity. All rights reserved.

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