Lithuania rewrote its personal income tax for 2026. Most of your income now goes into one pooled annual total, taxed at 20%, 25% or 32%. Dividends and long-held shares stay outside it at a flat 15%.
This guide covers Lithuanian personal tax for people moving to or living in Lithuania in the 2026 tax year, which is the calendar year.
The key question is simple. Which lane does your income fall into? The pooled lane can cost 20% to 32%. The separate lane costs 15%.
What's changed: from 1 January 2026, a new 25% rate applies between €83,237.40 and €138,729, with 32% above that. Non-employment income joins the same total once it passes €27,745.80. Freelance profit keeps a reduced rate from 5% up to €42,500, but above that all of it is taxed at the normal rates. Property held for more than five years is exempt when sold, and a new progressive real estate tax applies to homes that aren't your main residence.
📋 Lithuania tax at a glance for 2026
Topic | Details |
|---|---|
Tax system | Worldwide income for residents, Lithuanian income only for non-residents |
Top income tax rate | 32% above €138,729 of pooled income. The tax-free allowance disappears above about €32,130 a year |
All-in on a US$100k salary | About 40% (about €87,000, single, including 19.5% employee social security and health insurance) |
Foreign income | Taxed for residents. Tax paid abroad under a treaty usually exempts it or gives a credit |
Dividends, interest, capital gains | Dividends 15%. Interest and gains 15% on the first €27,745.80, then pooled. Shares held over 5 years 15% |
Crypto gains | 15% on the first €27,745.80, then 20% to 32%. The first €2,500 of gains a year is exempt |
Residence at a glance | Getting in: easy (183 days in a year, 280 days over two years, or a home or centre of interests). Leaving: you can stay resident for the whole year you leave |
Double tax treaties | 58 applied (those with Russia and Belarus are suspended from 2026) |
The 2026 tax reform: one pooled total and three rates
Most of your income now goes into one annual total, so a large gain, rental profit or freelance contract can push the top slice of your salary into a higher band.
Image 1 — the 2026 reform: one pooled total, three rates and a 15% lane
The bands are set as multiples of the average monthly wage used for social insurance, €2,312.15 in 2026. The 20% band runs to 36 average wages and the 25% band to 60.
Income that isn't from employment, such as interest, rent and gains on shares held for five years or less, gets its own first slice. The first 12 average wages of it, €27,745.80, are taxed at 15%. Anything above that is added to the pooled total, and when the law works out your rate, this income is counted first. Board fees and some other payments are left out of the 15% slice and go straight into the pool.
A few types of income never join the pool and are taxed at a flat 15% whatever else you earn: dividends, gains on shares held for more than five years (if not bought through an investment account), investment account withdrawals above what you paid in, sickness and family benefits, and qualifying employee shares held for at least three years.
👉 State Tax Inspectorate (VMI): personal income tax rates from 2026 (in Lithuanian)
👉 Law XV-680 of 16 December 2025: the final text of the new article 6 rates (in Lithuanian)
When you become tax resident in Lithuania
You're a permanent Lithuanian resident for tax in a calendar year if any one of these applies:
your permanent home that year is in Lithuania
your personal, social and economic interests are greater in Lithuania than abroad
you spend more than 183 days in Lithuania in the year, in one stay or several
you spend at least 280 days in Lithuania over two calendar years in a row, with at least 90 days in one of them
The 280-day test catches people out. The State Tax Inspectorate's example is 110 days one year and 175 the next: neither year passes 183 days, but you're resident in both.
Leaving takes more than getting on a plane. You're treated as leaving for good only when you cut your personal, social and economic ties. If you've been resident for at least three years in a row, you stay resident until the day you leave if you spent 183 days or fewer in Lithuania that year, and for the whole year if you spent more. Move to a listed low-tax territory while keeping a Lithuanian business, a stake of more than 25% in a Lithuanian company, or more than 30% of your income from Lithuania, and you can stay resident for that year and two more.
👉 State Tax Inspectorate: who is a permanent Lithuanian resident for tax (in Lithuanian)
Income tax rates for 2026
These rates apply to your pooled income: salary, all freelance profit once it passes €42,500, and other income above the €27,745.80 slice.
Lithuania income tax rates for 2026
Pooled annual income | Rate |
|---|---|
Up to €83,237.40 | 20% |
€83,237.40 to €138,729 | 25% |
Over €138,729 | 32% |
Dividends and shares held over 5 years | 15%, not pooled |
First €27,745.80 of other non-employment income | 15% |
Source: Personal Income Tax Law article 6, as amended by Laws XV-343 and XV-680, in force from 1 January 2026.
There's a tax-free allowance, but only at low incomes. It's €747 a month on pay up to the minimum wage of €1,153, and it shrinks to nothing at €2,677.49 a month. Worked out over the year, the most you can get is €8,964, and it's gone once your income passes about €32,130.
Worked example
You're single and work for a Lithuanian employer in 2026, earning €87,000 (about US$100k).
Your income tax is 20% on the first €83,237.40 (€16,647.48) plus 25% on the remaining €3,762.60 (€940.65), which is €17,588.13. You get no tax-free allowance at this level.
You pay social insurance of 12.52% (€10,892.40) and compulsory health insurance of 6.98% (€6,072.60). These aren't deducted before income tax is worked out.
Your all-in bill is about €34,550, or 40% of your salary.
Freelancing in Lithuania
Most freelancers work under an individual activity certificate (individualios veiklos pažyma). You register with the State Tax Inspectorate at least one working day before you start. You can then deduct either your actual, documented costs or a flat 30% of your income.
Your taxable profit is taxed at 20%, reduced by a tax credit. The effect is a rate of 5% on taxable profit up to €20,000, rising steadily to 20% at €42,500. Above €42,500 the credit is lost completely and all of your profit is taxed in the pooled total at 20%, 25% or 32%. Before 2026 the reduced scale ran from 5% to 15%, with a €35,000 limit.
You also pay Sodra contributions of 19.5% on 90% of your taxable profit, capped at 43 average wages (€99,422.45) for 2026. That covers pension, sickness, maternity and health insurance. Health insurance is at least €80.48 a month unless you're insured another way.
On US$100k of fees (about €87,000): after the 30% deduction your taxable profit is €60,900. That's above €42,500, so income tax is €12,180 and contributions are €10,688. The total is about €22,870, or 26% of your fees.
On €40,000 of fees: your taxable profit is €28,000 and income tax is about €2,890, an effective 10% of profit. Contributions add €4,914, for about 19.5% in all.
The business certificate (verslo liudijimas) is a simpler option for some trades. You pay a fixed tax set by your municipality, but only for listed activities, on income up to €50,000 a year, and mainly selling to individuals: sales to companies are limited to €4,500 a year.
👉 State Tax Inspectorate: individual activity and the business certificate (in Lithuanian)
👉 Sodra: contribution rates for the self-employed from 1 January 2026 (in Lithuanian)
Crypto, investments and pensions
How is crypto taxed in Lithuania? The State Tax Inspectorate treats an occasional sale as the sale of other property. If your gains for the year, after documented purchase costs, are €2,500 or less, they aren't taxed and you don't declare them. Above that, only the part over €2,500 is taxed: it falls into the 15% slice up to €27,745.80 and are then pooled at 20% to 32%.
Swapping one crypto for another counts as a sale, valued at the market price of what you receive.
If your trading is independent, regular and aimed at earning income, it can be treated as individual activity instead, with the freelance rules above.
On a gain of €87,000 (about US$100k) and no other income, the tax is about €15,580, or 18%.
Dividends are taxed at a flat 15%, whether they come from Lithuania or abroad. For foreign dividends, tax withheld abroad is credited up to the treaty rate. Gains on shares are taxed at 15% if you held them for more than five years. If you held them for less time, the gain uses the 15% slice and then joins the pooled total. With an investment account (investicinė sąskaita), tax waits until you withdraw more than you paid in.
Pensions from a foreign state fund are exempt. The State Tax Inspectorate's guidance on foreign income gives this as its example, so a state pension from abroad is usually not taxed in Lithuania. Private and workplace pensions from abroad can be treated differently, so check how yours is classed before you move.
Lithuania has no wealth tax. Inheritance tax is 5% if the inherited property is worth up to €150,000, and 10% of the whole value if it is worth more. Spouses, children, parents, grandparents, grandchildren, brothers and sisters inherit tax free, and the first €3,000 is exempt for everyone.
Real estate tax changed in 2026 too. Your main home is exempt up to a value of at least €450,000, set by your municipality. Other homes pay nothing on the first €50,000 of value, then 0.2% rising to 1% above €1 million.
👉 State Tax Inspectorate: crypto accounting and tax (seminar slides, in Lithuanian)
👉 Inheritance Tax Law: rates and family exemptions (in Lithuanian)
Social security
Lithuania's social insurance fund is Sodra. Employees pay 19.5% of their pay in 2026: 8.72% pension, 1.99% sickness and 1.81% maternity insurance, plus 6.98% compulsory health insurance.
If you join the second-pillar pension savings scheme, a further 3% is added. Employers pay much less than in most of Europe, about 1.77% on a permanent contract.
If you live in Lithuania and aren't insured through work, the state or another EU country (for example with an S1 form), you pay health insurance yourself: €80.48 a month in 2026.
👉 Sodra: contribution rates for employees and employers (in Lithuanian)
Double tax treaties
Does Lithuania have double tax treaties? Yes. The Ministry of Finance lists 58 treaties that Lithuania applies, including with the UK, the United States, Germany, France, Ireland, the Netherlands, Spain, Italy, Poland, Latvia, Estonia, Sweden, Norway, Switzerland, Israel, the UAE, Singapore, Japan, China, India and Canada. The treaties with Russia and Belarus haven't been applied since 1 January 2026.
If the 280-day rule makes you resident in Lithuania and another country in the same year, the treaty tie-breaker decides which one comes first.
👉 Ministry of Finance: Lithuania's tax treaties (in Lithuanian)
Long stays: there's no digital nomad visa
Lithuania doesn't have a digital nomad visa. EU, EEA and Swiss citizens can live and work there freely.
For everyone else, the rules have tightened. Since 1 July 2024, people who came in visa free, on a national or Schengen visa, or with another country's residence permit can't work in Lithuania on that basis alone. They need a Lithuanian temporary residence permit issued on a specific ground, such as work in Lithuania.
👉 Migration Department: foreigners working in Lithuania need a Lithuanian residence permit
Who is Lithuania good for?
How does Lithuania compare for different kinds of mover? Ratings are relative to the 150+ countries TaxPilot covers, based on the 2026 tax year and the all-in cost including social security and health insurance.
☑️ Who is Lithuania good for? Tax ratings for expats in 2026
Expat profile | Lithuania rating | Why |
|---|---|---|
Employees | Poor | About 40% all-in on a US$100k salary: income tax at 20% and 25%, plus 19.5% employee contributions. There's no special regime for people moving in. |
Freelancers (self-employed) | Moderate | About 26% all-in on US$100k of fees with the 30% cost deduction. Above €42,500 of taxable profit the reduced rate is lost, and contributions are 19.5% of 90% of profit. |
Retirees | Good | About 7% on a US$40k foreign state pension plus US$20k of investment income, including the €80.48 monthly health contribution. The state pension is exempt and dividends pay 15%. Inheritance tax applies outside close family. |
Crypto gains | Moderate | About 18% on a US$100k gain: the first €2,500 a year is tax free, then 15% up to €27,745.80 and 20% or more above that. |
Investment income | Good | Exactly 15% on our US$1m portfolio: dividends and shares held over five years pay a flat 15%. Shorter holdings can reach 20% above €27,745.80. No wealth tax. |
Digital nomad visa | Poor | There's no digital nomad visa. Non-EU citizens need a Lithuanian residence permit on a specific ground, such as work in Lithuania, to work there. EU and EEA citizens can simply move. |
Filing and deadlines
The annual income tax return (form GPM311) is due by 1 May of the following year, and any tax due is paid by the same date. For 2026 income the deadline is 3 May 2027, because 1 May falls on a weekend. You file online with the State Tax Inspectorate.
Employees have tax taken through payroll, but you usually need to file if you have other income, foreign income or pooled income that crosses a band. Freelancers report individual activity in the same return and can pay Sodra contributions once a year after declaring, or monthly in advance. Real estate tax for 2026 is due by 15 March 2027.
👉 State Tax Inspectorate: return codes and the 3 May 2027 deadline (seminar slides, in Lithuanian)
Frequently asked questions
What are the income tax rates in Lithuania in 2026?
Pooled income is taxed at 20% up to €83,237.40, 25% up to €138,729 and 32% above that. Dividends and shares held for more than five years are taxed separately at 15%.
How many days make you tax resident in Lithuania?
More than 183 days in a calendar year, or at least 280 days over two calendar years in a row with at least 90 days in one of them. In the second case you're resident in both years. You can also be resident through a permanent home or your centre of interests.
How are freelancers taxed in Lithuania?
Under an individual activity certificate, taxable profit up to €20,000 is effectively taxed at 5%, rising to 20% at €42,500. Above €42,500 all of it is taxed at the normal rates. Sodra contributions are 19.5% of 90% of profit.
How is crypto taxed in Lithuania?
The first €2,500 of gains a year isn't taxed. Gains above that are taxed at 15% up to €27,745.80 and then at 20% to 32%. Swapping one crypto for another counts as a sale.
Is a foreign pension taxed in Lithuania?
A pension from a foreign state fund, such as a state pension, is exempt from Lithuanian income tax. Private and workplace pensions can be taxed. If you're not insured another way, you may also pay the €80.48 monthly health contribution.
Does Lithuania have a digital nomad visa?
No. EU and EEA citizens can move freely. Other nationals need a Lithuanian temporary residence permit to work there, which is normally tied to a job or business in Lithuania.
Where to go next
Important information
This article is general information and does not constitute tax, legal, immigration or financial advice, and does not create a client relationship. Tax outcomes depend on travel history, income sources, treaty status and the law applying to the relevant year. Rates, thresholds and regimes change, and some measures described may be proposed rather than enacted; this article reflects our understanding as at the date of publication. Obtain advice from a suitably qualified professional before acting or refraining from action.
