There are probably quite a few places in the world where you are not required to pay taxes. And Lithuania is no exception to that rule. The agency responsible for these contributions here is the State Tax Inspectorate (Valstybinė mokesčių inspekcija or just VMI).
It’s imperative to responsibly take care of this procedure on time. Otherwise, you might face severe penalties. Therefore today we’ll discuss when and how to declare taxes in Lithuania in 2023.
When to Declare Taxes in Lithuania in 2023
The tax year in Lithuania runs from the first day of the year to the last — from January 1st to December 31st. The deadline for filing tax returns is May the 2nd of the following year. It means that you must file tax returns for 2022 by the 2nd of May 2023, 2023 taxes by the 2nd of May 2024, and so on.
You don’t want to miss this deadline though, as it might end up in sizable fines, interest charges, and penalties.
Types of Taxes in Lithuania
Here are the different types of taxes in Lithuania:
Personal Income Tax (PIT). This is a tax you pay from your salary, bonuses, and other sources of income. Its percentage varies depending on the type of activity you do and how much you earn from it. The most common PIT in Lithuania is 20% — it’s subtracted from full-time employment salaries not exceeding 101,094 per calendar year.
Corporate Income Tax (CIT). Companies operating in Lithuania must pay a 15% tax on their profits.
Value Added Tax (VAT) is the European Union-specific tax based on value added to goods and services. It’s a sales tax that has a standard rate of 21% in Lithuania. Some goods and services have a reduced VAT rate.
Real Estate Tax. Companies or individuals must pay this tax based on the value of their property.
How to Declare Taxes in Lithuania in 2023
Filing tax returns is relatively easy in Lithuania. All you have to do is to visit VMI’s website and create an account. In most cases, VMI uses its access to automatically form the amount of taxes you need to pay: the only thing you’ll need to do is to approve. However, in some cases — for instance, when you’re getting money from abroad — you will still need to input the data manually.
To file a tax return, you will need to provide information about your income and expenses during the tax year. This may include any information about deductions or tax credits that you are eligible for.
After you finish filing the tax return, you will receive a notice of assessment from the State Tax Inspectorate. If you still owe any tax, you will learn it from this letter. Or it will just tell you everything is alright.
Keep in mind that keeping accurate records of all financial transactions throughout the year will make your life much easier when it comes to tax returns. Mostly because it will minimize a possibility of a mistake.
Try using our free salary calculator to assess the amount of taxes you are to pay per month.
In conclusion, you must file tax returns in Lithuania for 2022 by May 2nd, 2023. Generally, it’s not that challenging as VMI usually prepares the amount you are to declare and pay for. However, in some cases it might require information from your side — therefore it’s smart to keep track of your income and expenses throughout the tax year. It’s significantly more difficult to do for companies than for individuals. For instance, financial statements need assessment done by auditors. If you still haven’t found one for the current tax year, you are lucky! Our professional audit team with 3 decades of experience is ready and willing to help — just contact us!