Expatriates’ tax regime

General principles of individual taxation

The object of income tax of a non-resident of Lithuania shall be:1. income from individual activities carried on from a fixed base as well as income received in foreign countries and attributed to the said fixed base in Lithuania;2. income sourced in Lithuania and received otherwise than through a fixed base, i.e.:

  1. interest;
  2. income from distributed profits;
  3. income from distributed profits and annual bonuses to Board and Supervisory Board members;
  4. income from the rent of immovable property located in Lithuania;
  5. royalties;
  6. income incidental to employment relations or relations in their essence corresponding to employment relations;
  7. income from sports activities, including income connected directly or indirectly to those activities, irrespective of whether it is paid directly to a sportsman or a third person acting on behalf of the sportsman;
  8. income from performing activities, including income connected directly or indirectly to those activities, irrespective of whether it is paid directly to a performing artist or a third person acting on behalf of the performing artist;
  9. income from the sale or other transfer into ownership of movable property where such type of property is subject to legal registration under the legal acts of the Republic of Lithuania and where it is (or must be) registered in Lithuania, and also from the sale or other transfer into ownership of immovable property located in Lithuania;
  10. compensations for violation of copyright or neighbouring rights.

A natural person who is not deemed to be a resident of Lithuania may apply to the tax administrator for recognition as a resident of Lithuania, provided that his income sourced in Lithuania during the tax period (except for the income on which income tax reliefs provided by the treaties of the Republic of Lithuania or the avoidance of double taxation were applied during the said tax period) accounts for not less than 90% of the total income received during the tax period.

A permanent residency status for Lithuanian taxation purposes applies to an individual:

  1. who has a main permanent residence place in the territory of Lithuania within the tax period (i.e. calendar year).; or
  2. who’s place of personal, social or economic interest within the tax period is more likely in Lithuania rather than abroad; or
  3. who is present in Lithuania permanently or with intermissions equal or exceeding, in total, 183 days within the tax period any twelve-month period commencing or ending in the calendar year or commencing in one and ending in another calendar year.; or
  4. who is present in Lithuania permanently or with intermissions equal or exceeding, in total, 280 days within the tax periods following each other and in one of such tax periods his/her presence permanently or with intermissions become equal or exceeding, in total, 90 days; or
  5. who is a citizen of the Republic of Lithuania who receives remuneration under an employment contract or a contract in its essence corresponding to an employment contract or whose costs of living in another country are covered from the state budget or municipal budgets of Lithuania.

Thus, permanent Lithuanian tax residents have full tax liability on their worldwide income, unless:

  • A specific type of income is tax exempt in accordance with the Lithuanian legislation; and/or
  • A tax relief under the double tax avoidance treaty is available.

Rates are provided in “Personal income tax” section.