Lithuania Corporate Tax Guide 2026

Overview — VMI Corporate Taxation

The State Tax Inspectorate (VMI) administers corporate income tax in Lithuania. Companies registered in Lithuania are taxed on their worldwide income. Non-resident companies are taxed only on Lithuanian-source income. The tax year is the calendar year, though companies may apply for a different financial year. Corporate tax returns must be filed by 30 June of the following year. Lithuania has fully implemented EU directives, including the Parent-Subsidiary Directive and Interest and Royalties Directive.

Standard CIT Rate — 15%

The standard corporate income tax rate in Lithuania is 15%. This applies to the majority of companies and is one of the most competitive rates in the EU. The rate applies to all taxable profits derived by Lithuanian resident companies. Taxable profit is calculated as accounting profit adjusted for tax-deductible expenses, depreciation differences, and other tax adjustments. Capital gains realised by companies are included in taxable profit and taxed at the standard CIT rate.

Reduced Rate — 5% for Small Companies

Small companies may benefit from a reduced CIT rate of 5%. Qualifying conditions:

• Annual revenue: Does not exceed EUR 300,000
• Number of employees: Fewer than 10 employees on average

The 5% rate applies to the first EUR 100,000 of taxable profit. Any profit above EUR 100,000 is taxed at the standard 15% rate. This reduced rate makes Lithuania particularly attractive for small and medium-sized enterprises (SMEs) and start-ups in their growth phase. Companies must monitor their eligibility each tax year, as exceeding either threshold triggers the standard rate for that year.

Zero Rate — 0% for Start-ups

Qualifying newly established companies (start-ups) may benefit from a 0% CIT rate in their first tax year. This is available for companies that meet the small company criteria and are in their first year of operation. The company must not have been formed through a reorganisation or restructuring. After the first year, the company typically transitions to the 5% reduced rate (if still qualifying) or the standard 15% rate.

Tax Depreciation and Amortisation

Lithuanian tax law allows depreciation deductions using the straight-line method. Standard depreciation rates include:

• Buildings: 10–20 years (5–10% per year)
• Machinery and equipment: 4–8 years (12.5–25% per year)
• Computer hardware: 3 years (33.33% per year)
• Software: 3 years (33.33% per year)
• Intangible assets: Amortised over the useful life (max 15 years)
• Vehicles: 6 years (16.67% per year)

Accelerated depreciation is available for certain assets, including environmental investments and assets used in free economic zones.

Tax Losses

Tax losses can be carried forward indefinitely to offset against future taxable profits. However, the loss carry-forward is limited to 70% of the current year's taxable profit per year. Losses arising from the disposal of securities and derivatives may be subject to specific limitations. There is no carry-back of losses.

Participation Exemption

Lithuania fully implements the EU Parent-Subsidiary Directive. Dividends received from qualifying subsidiaries (holding at least 10% of shares for a minimum of 12 months) are exempt from CIT. Capital gains from the disposal of shares in qualifying subsidiaries are also exempt from CIT, provided the shares have been held for at least 3 years. This participation exemption makes Lithuania an attractive jurisdiction for holding companies.

FAQs

What is the CIT filing deadline?

Corporate tax returns must be filed by 30 June following the end of the tax year. Tax payments are due by the same date.

Are there quarterly advance payments?

Companies are generally required to make quarterly advance CIT payments based on the previous year's tax liability. New companies may have specific rules for their first year.

Can a company choose a different financial year?

Yes, companies may apply to VMI to use a different financial year, subject to approval.

Disclaimer

This guide provides general information about Lithuanian corporate income tax for the 2026 tax year. Tax laws and rates may change. Always consult with a qualified Lithuanian tax advisor or VMI directly for advice specific to your situation. InvestmentKit does not provide tax advice.