Lithuania Tax Residency Guide 2026

Overview — Residency Rules

Tax residency determines the scope of a taxpayer's liability. Lithuanian tax residents are taxed on their worldwide income. Non-residents are taxed only on Lithuanian-source income. The rules differ for individuals and legal entities. The VMI (State Tax Inspectorate) is responsible for determining residency status in borderline cases. Lithuania follows OECD model treaty principles in its domestic residency rules.

Individual Residency — 183-Day Rule

An individual is considered a Lithuanian tax resident if they meet any of the following conditions:

• 183-day test: Physical presence in Lithuania for 183 or more days in any 12-month period (not necessarily a calendar year)
• Permanent home: The individual has a permanent home (domicile) in Lithuania that serves as their centre of vital interests (family, economic activities, personal interests)
• Habitual abode: The individual habitually resides in Lithuania

The 183-day test is the most commonly applied criterion. Days of arrival and departure generally count as days of presence. Short-term absences (business trips, holidays) do not break the continuity of presence but the days outside Lithuania do not count. A non-resident who becomes a resident by exceeding 183 days becomes a resident from the first day of exceeding the threshold.

Corporate Residency

A company is considered a Lithuanian tax resident if:

• Place of incorporation: The company is incorporated or registered under Lithuanian law
• Place of effective management: The company's place of effective management (POEM) is in Lithuania, meaning key management and commercial decisions are made in Lithuania

Companies that are both incorporated and effectively managed abroad but operate through a permanent establishment in Lithuania are subject to CIT only on Lithuanian-source income attributable to the PE.

Double Tax Treaty Network — 60+ Treaties

Lithuania has concluded over 60 double tax treaties, making it well-integrated into the global tax network. Key treaties include:

• EU member states: All 27 EU countries (with full implementation of EU directives)
• North America: United States and Canada
• Asia: China, India, Japan, South Korea, UAE, Singapore, Kazakhstan, Uzbekistan
• Europe (non-EU): United Kingdom, Switzerland, Norway, Ukraine, Belarus, Moldova, Serbia, North Macedonia
• Other: Australia, South Africa, Israel, Turkey, Azerbaijan, Georgia

Most DTTs follow the OECD Model Tax Convention and provide reduced withholding tax rates on dividends (typically 5–15%), interest (0–10%), and royalties (5–10%).

Tie-Breaker Rules

When an individual is considered resident in both Lithuania and another country under domestic laws, the DTT tie-breaker rules determine residency. The standard OECD tie-breaker hierarchy:

• Permanent home: The individual is resident in the country where they have a permanent home available
• Centre of vital interests: If a permanent home is available in both, the individual is resident where their personal and economic relations are closer
• Habitual abode: If the centre of vital interests cannot be determined, the individual is resident where they have an habitual abode
• Nationality: If still unresolved, the individual is resident in the country of which they are a national
• Mutual agreement: As a last resort, the competent authorities of both countries will resolve the matter by mutual agreement

Implications of Residency

The consequences of being a Lithuanian tax resident include:

• Worldwide income: Residents are taxed on all income, wherever earned
• Capital gains: Worldwide capital gains are subject to Lithuanian CGT (15%, but exempt for shares held >3 years)
• Reporting: Residents must report foreign assets, accounts, and income
• Social security: Residents are generally subject to Lithuanian social security (Sodra)
• Exit tax: Individuals leaving Lithuania may be subject to exit tax on unrealised capital gains in certain circumstances

FAQs

Does a short visit to Lithuania trigger residency?

Visits of less than 183 days in any 12-month period generally do not trigger residency. However, if you have a permanent home in Lithuania and your centre of vital interests is there, you may be considered resident even with fewer days.

Can a non-resident be taxed on Lithuanian income?

Yes, non-residents are taxed on Lithuanian-source income. The tax is typically withheld at source (WHT on dividends, interest, royalties) or assessed on income attributable to a permanent establishment in Lithuania.

What is the exit tax in Lithuania?

Lithuania applies an exit tax on unrealised capital gains when an individual or company transfers tax residency out of Lithuania. This applies to certain assets and can be deferred under specific conditions.

Disclaimer

This guide provides general information about Lithuanian tax residency rules for the 2026 tax year. Tax laws and treaties 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.