Before you start

Personal code (asmens kodas)
Smart-ID, a bank login or another accepted electronic identity to use the VMI's EDS system
A Lithuanian bank account for refunds

Step-by-step

1
Get your personal code and register with VMI
The State Tax Inspectorate identifies you by personal code. Employment income is reported by your employer; you still need EDS access for the annual return and for any non-employment income.
OnlineWho: You
2
Check how your non-taxable amount (NPD) is applied
The monthly non-taxable amount reduces as income rises and is applied by one employer. If you have two payers, only one may apply it — otherwise you underpay and owe at filing.
Via employerWho: You
3
Understand what Sodra takes on top
Employee social insurance contributions come out of gross salary alongside GPM, including the 6.98% PSD health element. Pension accumulation adds more if you have opted into the second pillar.
Via employerWho: Your employer
4
File the annual return through EDS
Returns are filed electronically in the spring for the preceding calendar year, largely pre-filled from employer data. The deadline is published annually by VMI.
OnlineWho: You
5
Declare foreign income if you are tax resident
Lithuanian tax residents are taxed on worldwide income. Foreign salary, rent and investment income all belong on the return, with double tax relief applied where a treaty covers it.
OnlineWho: You

Documents you’ll need

Personal code
Electronic identity for EDS access
Annual income statements from employers and, if relevant, foreign payers
Lithuanian bank account details for refunds

Things most newcomers don’t know

Lithuania stopped being a flat-tax country on 1 January 2026.

The old two-tier 20%/32% structure became a three-tier 20%/25%/32% one, and — more importantly — almost all income types are now aggregated to determine which band applies rather than being taxed in separate silos. Anyone modelling a Lithuanian package on a pre-2026 calculator, or on the country's flat-tax reputation, is working from the wrong structure.

Source: KPMG GMS Flash Alert — Lithuania, changes in taxation of personal income as of 2026

The band thresholds are multiples of the average wage, so they move every year.

36× and 60× the average monthly wage (VDU), not fixed euro amounts. The figures around €82,962 and €138,270 are the ones that applied when the reform was legislated; they are re-derived as the wage series updates. Quote the multiple, verify the euro figure on the day.

Source: KPMG GMS Flash Alert — Lithuania 2026 PIT bands

Dividends stayed at 15% while salary got more progressive.

Distributed profits, certain long-held share gains, life insurance and pension benefits remain outside the aggregation and are taxed at a flat 15%. For a founder taking a mix of salary and dividends, the 2026 reform changed one side of the equation and not the other — which is worth modelling before setting your own pay.

Source: PwC — Lithuania individual taxes on personal income

183 days makes you tax resident whatever your document says.

Residency follows presence and permanent home, not visa category. Someone on a national visa working remotely for a foreign employer for most of a year is a Lithuanian tax resident on worldwide income, with a filing obligation, even though they have no Lithuanian employer and no Lithuanian income. The immigration and tax systems are not connected here.

Source: VMI — determination of tax residency

Common mistakes to avoid

Using a pre-2026 calculator — the band structure and the aggregation rule both changed.
Treating the €82,962 / €138,270 thresholds as fixed rather than as multiples of the average wage.
Applying the non-taxable amount at two employers at once and owing money at filing.
Assuming a foreign employer means no Lithuanian tax — 183 days is the test.
Forgetting that Sodra contributions sit alongside GPM, so the headline rate understates the deduction.

Some of this may be out of date. Spotted something inaccurate? Help us keep it right for the next newcomer.