Import Procedures

As a member of the European Union, Lithuania applies EU Customs Code. When introducing goods into Lithuania, exporters shall fill in a Declaration of Exchange of Goods or Intrastat declaration. When the country of origin of the goods exported to Lithuania is not part of the European Union, customs duties are calculated Ad valorem on the CIF value of the goods, in accordance with the Common Customs Tariff (CCT).

As part of the 'SAFE' standards set forth by the World Customs Organisation (WCO), the European Union has set up a new system of import controls, the 'Import Control System' (ICS), which aims to secure the flow of goods at the time of their entry into the customs territory of the EU. This control system, part of the Community Programme eCustoms, has been in effect since 1 January 2011. Since then, operators are required to pass an Entry Summary Declaration (ENS) to the customs of the country of entry, prior to the introduction of goods into the customs territory of the European Union.

A new system, the Union Customs Code (UCC), entered into force in October 2013 as part of customs modernisation reform.

For more information, please visit the website of Lithuanian Customs.

Distribution market players

Large-scale retail is without doubt one of the most thriving sectors in Lithuania and major brands in the industry are owned by national companies. The sector is closely linked to land-use planning as supermarkets must first and foremost be easily accessible for their customers who choose where to shop largely based on the accessibility. Since the declaration of independence and accession to the European Union, foreign companies have sought to enter the Lithuanian market and develop large shopping centres and brand names.
Major retailers include:

• CBA (Hungarian company)
• Express Market
• Norfa
• IKI
• Maxima
• Rimi

Consumption Taxes

Nature of the Tax

Value Added Tax (VAT) - Pridetines vertes mokestis (PVM)

Tax Rate

21%

Reduced Tax Rate

A reduced rate of 9% applies to:

1. Thermal energy supplied for space heating (including thermal energy transmitted through hot water supply systems), to hot water or cold water used for the preparation of hot water, and to thermal energy used to heat water supplied to living quarters.

2. Books and non-periodical information publications (including textbooks, workbooks, encyclopedias, dictionaries, manuals, information leaflets, photo and reproduction albums, children's picture books, drawing and coloring books, music printed or in manuscript form, maps, diagrams and drawings, however, excluding calendars, notebooks and other similar publications).

3. Accommodation services provided in accordance with the procedure laid down in the legislation governing tourism activities, until 31 December 2022.

4. Passenger and luggage thereof transport services on regular transport routes established by the Ministry of Transport and Communications or an institution authorized by it or by municipal authorities.

5. Firewood and timber products intended for heating purposes supplied to household consumers as defined in the Law on Energy.

6. Catering and take-away services provided by restaurants, cafés and other similar catering services, excluding services or part thereof linked to alcoholic beverages, until 31 December 2022.

7. Accessing all types of art and cultural institutions and events, sporting events and sports clubs, and to using services of persons providing services similar to those of sports clubs, when provisions of Article 23 of Law on VAT do not apply, until 31 December 2022.

8. Performance services provided by performers (actor, singer, musician, conductor, dancer or any other person acting, singing, reading, reciting or otherwise giving literary, artistic, folklore or circus performances), until 31 December 2022.

A further reduced rate of 5% applies to:

1. Supply of pharmaceuticals and medical aid equipment, when acquisition costs thereof are fully or partially reimbursed in accordance with the procedure established by Law on Health Insurance of the Republic of Lithuania, as well as to non-reimbursed prescription medicines, except for medicines subject to a VAT rate of 0%.

2. Technical aids and repairs thereof for persons with disabilities.

3. Printed and/or electronic newspapers, magazines and other periodicals (including those published by electronic means), including electronic information documents and/or collections thereof periodically updated by the disseminator of public information or consisting of content substantially similar to that of a printed periodical (regardless of whether the electronic information documents and collections thereof are printed or not). The provisions thereof do not apply to technical, bibliographic and other similar databases, publications of erotic and/or violent nature, publications failing to comply with professional ethics as established by authorized institutions, and to publications where paid advertising makes up more than 4/5 of the total publication or where most of or all of the paid advertising is consisting of music or video content.

VAT rate of 0% applies to certain supplies of goods and services. and to COVID-19 vaccines and COVID-19 vitro diagnostic medical devices (until 31 December 2022).

VAT-exempt goods and services include health care services and goods; real estate rent and disposals; insurance and reinsurance services; certain financial services; cultural and sporting activities; educational services; betting and gaming services; universal postal services; social and related services; radio and television services.

Other Consumption Taxes

Excise duty is imposed on ethyl alcohol and alcoholic drinks, processed tobacco, energy products, electric energy, energy-related products, coal, coke, and lignite. More detailed information on excise duties concerning alcoholic beverages, tobacco products, and energy products is availableon the European Commission website.

Corporate Taxes

Company Tax

15%

Tax Rate For Foreign Companies

Lithuanian entities are subject to tax on their worldwide income after the deduction of the income of their permanent establishments; whereas non-resident entities are subject to tax on Lithuania-sourced income and income received by their permanent establishment in Lithuania.

Capital Gains Taxation

Capital gains of resident and non-resident companies are taxed as general taxable income at a rate of 15%. Capital gains from the sale of shares of a company that is resident in Lithuania or in another EU/European Economic Area member state may be exempted if the investor (Lithuanian firm or permanent establishment of a foreign company) maintains uninterrupted participation of more than 10% for at least two years (three years in the case of a reorganization).

Main Allowable Deductions and Tax Credits

Depreciation of tangible and intangible assets is tax-deductible at rates ranging from 5% (residential buildings) to 33.3% (computer, software). Goodwill is also deductible over 15 years.
Start-up expenses, interest charges and bad debts are generally deductible whereas provisions for doubtful debts are not deductible.
Donations to charitable organisations give rise to a 200% tax deduction, capped at 40% of taxable income (before the deduction of donations and the carryforward of tax losses).
Fines and penalties are not deductible. Taxes are deductible except for VAT and corporation tax.
Entertainment fees are deductible up to 50% and their deduction is capped at 2% of the company's income. Travel expenses related to the business are generally deductible, the same as contributions and expenses for the benefit of employees.
Tax losses can be carried forward indefinitely, yet for each year, they can only be offset by 70% of taxable income. The rest of the losses can be offset against income from previous years. Losses from the sale of shares may be carried forward for up to five years and may only be offset against income from the sale of shares. The carryback of losses is not permitted.

Other Corporate Taxes

), the same as for the tax on land leases. The property tax varies between 0.5% and 2% (the rate is determined by municipal councils - properties with a value of up to EUR 150,000 are exempt).
There are no stamp duties in Lithuania. On the other hand, a small fee is payable for the issuance of certain documents by public services.
Social security contributions payable by the employer vary between 1.77% and 2.49% for income up to EUR 90,246 per year (employees' contributions are lower for incomes above this threshold). Employers withhold 0.16% of the gross salary for the Guarantee Fund (which provides financial assistance to employees in case their employers go bankrupt). They also pay a contribution equal to 0.16% of the gross salary for the Long-Term Employment Fund.
An environmental tax is levied on pollutants released into the environment, and a separate tax is payable on the value of extracted natural resources.

Other Domestic Resources

Consult the Doing Business Website, to obtain a summary of taxes and mandatory contributions.

Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed

See the list of the tax conventions signed by Lithuania.

Withholding Taxes

Dividends: 15%, Interest: 0 (paid to residents, EEA-resident companies and companies resident in countries that have concluded a tax treaty with Lithuania)/10% (non-resident companies)/15% (non-resident individuals), Royalties: 0 (paid to resident companies)/10% (non-resident companies)/15% (resident and non-resident individuals).
The rates can be reduced under a tax treaty.