Accounting & Tax Compliance in Lithuania

Statutory accounts, VAT returns, and corporate tax filings aligned with Lithuanian standards, including R&D triple-deduction documentation where applicable.

Lithuania Reviewed September 2026

Currency

EUR

Corporate tax rate

17% standard (2026, up from 16%) · 7% for qualifying small companies · 0% for new small companies' first 2 tax periods

VAT standard rate

21%

Legal forms

UAB · AB

Bookkeeping standard

Lithuanian Business Accounting Standards, or IFRS for listed/large entities

Annual filing

Annual accounts filed with the Register of Legal Entities within 30 days of approval

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How accounting and tax compliance work in Lithuania

Lithuania's standard corporate income tax rate rose from 16% to 17% from 1 January 2026, with the reduced rate for qualifying small companies (fewer than 10 employees, revenue under €300,000) increasing from 6% to 7%. The 0% rate for newly registered small companies was extended from one to two years in the same reform, and the employee-count condition for this startup rate was removed, broadening eligibility. The UAB, Lithuania's standard private limited company, requires €2,500 in minimum share capital with at least 25% paid up before registration.

Operating in Lithuania combines a 2026 corporate tax increase with structurally low employer-side social contributions, and offers one of the EU's most generous R&D deduction regimes for technology and product-development companies specifically.

Discuss your Lithuania accounting setup

Rate structure and what it applies to

17% standard (2026, up from 16%) · 7% for qualifying small companies · 0% for new small companies' first 2 tax periods

2026 corporate tax increase — — standard rate to 17% (from 16%), small-company rate to 7% (from 6%), effective 1 January 2026
Extended 0% startup rate — — new small companies now qualify for two tax periods at 0%, up from one, with the employee-count eligibility condition removed
Progressive personal income tax transition — — moving to a three-tier 20%/25%/32% system on total income including employment, self-employment, rental and capital gains
Asymmetric Sodra contribution split — — employer pays only ~1.77%, employee pays ~19.5%, requiring clear gross salary communication to candidates unfamiliar with the structure

Get a jurisdiction-specific tax estimate

Rates that apply in Lithuania

Rate	Applies to
21%	Standard rate — most goods and services
9% and 5%	Reduced rate(s) — defined categories of goods and services

Confirm your VAT registration obligation

Lithuanian Business Accounting Standards, or IFRS for listed/large entities, and when an audit is required

Statutory bookkeeping in Lithuania follows Lithuanian Business Accounting Standards, or IFRS for listed/large entities. Statutory audit mandatory above 2 of 3 thresholds: €5.5M balance sheet, €11M turnover, 50 employees — aligned with EU harmonized thresholds.

Confirm your audit obligation

Annual accounts and registration

Annual accounts filed with the Register of Legal Entities within 30 days of approval, no later than 4 months after year-end for most entities.

Entity registration runs through the Register of Legal Entities, via the notary-assisted or online registration route, typically taking As little as 1–3 business days for a standard UAB.

Plan your filing calendar

Frequently asked questions

What changed with Lithuania's corporate tax rate in 2026?

The standard rate rose from 16% to 17%, and the reduced rate for qualifying small companies rose from 6% to 7%. The 0% rate for newly registered small companies was extended from one to two tax periods, and the employee-count eligibility condition for that rate was removed, broadening access for startups.

How does the 300% R&D deduction work?

For every €1 a company spends on qualifying research and development activity, €3 can be deducted from taxable income — among the most generous R&D incentives in the EU. This is available to any Lithuanian UAB regardless of whether founders are Lithuanian residents, making it particularly valuable for software and technology companies.

Why are Lithuanian employer social contributions so low?

Lithuania's Sodra social insurance system places most of the contribution burden on the employee (~19.5% of gross salary, covering pension, sickness and health insurance) rather than the employer (~1.77%). This asymmetric structure is the reverse of what employers from Western European markets typically expect, and should be communicated clearly when setting gross salary offers.

Should a solo founder choose a UAB or an MB?

A UAB offers more conventional limited liability structure and scales to larger operations, but dividend distributions are restricted to once per year after annual financial statement approval. An MB (small partnership, capped at 10 natural-person members) allows more flexible profit withdrawal without waiting for annual approval, often suiting solo founders or very small teams.

Talk to a Lithuania accounting expert

Companies and online guides referencing Lithuania's "16%" corporate tax rate or "6%" small-company rate are using figures superseded by the 2026 reform. Business plans, dividend strategies and pricing built on outdated rates should be revisited against the current 17%/7%/0% structure before finalising any Lithuanian entity decision.

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