Lithuania

Research notes

Lithuania — family-office tax dossier

Last reviewed: 2026-10-16 Tax year: 2026 Reviewer: research agent (Claude), unreviewed by a tax adviser

Summary

2026 reform: most income progressive 20/25/32%, but dividends and gains on shares held over 5 years stay at a flat 15%; real estate gains exempt after 5 years. Children fully exempt from inheritance tax; no gift tax; no wealth tax, but a new progressive tax on residential real estate above thresholds.

Residence and eligibility

• Tax residence: Resident if: permanent place of residence in Lithuania; centre of personal, social or economic interests in Lithuania; present 183+ days in the tax period; or 280+ days over consecutive tax periods with at least 90 in one; or certain state-paid citizens abroad.
• EU/EEA free movement (EU): Register residence as EU citizen.
• Temporary residence permit (non-EU) (US, OTHER): Permit on grounds such as business/investment or employment under the Law on the Legal Status of Aliens; investment thresholds not verified in this research.

Capital gains

• Rule in force: From 2026, gains on securities held 5 years or less are added to total income and taxed at 20/25/32% (32% above about EUR 138,700). Gains on shares/units held more than 5 years and acquired outside an investment account are taxed separately at a flat 15%. Real estate held 5 years or more is exempt (was 10 years).
• Exemptions/thresholds: Gains on financial instruments up to EUR 500/yr exempt; other capital gains up to EUR 2,500/yr. Main home in the EEA exempt after 2 years' declared residence (or reinvestment within 1 year).
• Conditions: 15% flat rate (PIT Law art. 6(6)(3)): income from selling shares, parts or units (akcijos, dalys, pajai) that were acquired outside an investment account more than 5 years before the sale is taxed at 15% and not added to annual income. A reorganisation or restructuring of the issuer does not restart the 5-year period (VMI clarification reported by KPMG, March 2026). Bonds and other financial instruments are not covered and are taxed at the progressive rates. Investment account (since 2025): withdrawals above contributions taxed at 15%; reinvested returns not taxed. Accounts in EEA/OECD/treaty countries; individual (not joint) only.
• Holding periods: Shares/units/interests: more than 5 years -> 15% flat. Real estate: 5 years -> exempt (10 years before 2026).
• Foreign assets: Worldwide gains taxed; relief for foreign tax under treaties, capped at Lithuanian tax.
• Trader risk: Individual-activity (self-employed) income has its own regime (effective 5-20% up to EUR 42,500, then progressive); frequent trading recharacterisation not researched.
• Exceptions, reforms, announced changes: 2026 reform (adopted 2025, in force 1 Jan 2026): most income is aggregated and taxed at 20% up to 36 average wages (EUR 83,237), 25% up to 60 AW (EUR 138,729) and 32% above; previously 15%/20% for capital gains. Dividends, gains on shares held more than 5 years (outside an investment account) and investment-account withdrawals stay at a separate flat 15%.
• Confidence: high, partially verified.
• JSON: headline 32%; listed domestic 15%, listed foreign 15%, private business 15%, local real estate 0%, foreign real estate 0%. Basis: Assumes holding beyond the 5-year period: shares 15% flat; real estate exempt after 5 years. Short-term gains (<=5 years) on a large amount: 32% marginal. Headline 32% = top aggregated rate.

Conditions for the 15% rate re-checked 2026-10-15 (KPMG Lithuania, March 2026, summarising VMI on art. 6(6)(3)): shares/parts/units acquired outside an investment account more than 5 years before sale; 15%, not aggregated; reorganisation does not restart the clock. Bonds excluded. Confidence raised to high.

Dividends

• Rule in force: Dividends, Lithuanian and foreign, are taxed at a flat 15% PIT, separately from other income (not aggregated). Foreign WHT is credited up to the Lithuanian tax and the treaty rate.
• Exceptions, reforms, announced changes: 2026 reform (adopted 2025, in force 1 Jan 2026): most income is aggregated and taxed at 20% up to 36 average wages (EUR 83,237), 25% up to 60 AW (EUR 138,729) and 32% above; previously 15%/20% for capital gains. Dividends, gains on shares held more than 5 years (outside an investment account) and investment-account withdrawals stay at a separate flat 15%.
• Confidence: high, verified.
• JSON: headline 15%, domestic 15%, foreign gross 15%, relief method 'credit'. Basis: Flat 15% on gross dividend; a 15% US treaty WHT would be fully credited, leaving little or no Lithuanian tax.
• Outbound withholding: Dividends to non-resident companies: 17% WHT from 2026 (was 15%), 0% under the 10%/12-month participation exemption, reduced by treaty. Dividends to individuals carry 15% PIT withholding.
• Treaties: Broad network across EU/OECD and the US; treaties with Russia and Belarus cease to apply from 1 Jan 2026 (PwC). Exact count not verified.
• Holding companies: Lithuania taxes company profits annually (17% from 2026), not on distribution; participation exemption for qualifying dividends and share gains.

Inheritance and gifts to children

• Rule in force: Inheritance tax exists (5% up to EUR 150,000, 10% above, EUR 3,000 threshold) but children, spouse, parents, grandchildren, grandparents and siblings are fully exempt. There is no gift tax; gifts are a PIT matter and gifts from close family are exempt.
• Exemptions/thresholds: Children (incl. adopted) fully exempt from inheritance tax.
• Foreign assets: Residents' worldwide inheritances are in scope for non-exempt heirs; foreigners only on Lithuanian-registered property.
• Confidence: high, partially verified.
• Gifts: No gift tax (PwC). Gifts are income for PIT purposes, but gifts from close family members are exempt (general rule; not re-verified).
• Business relief: Not needed for children.
• Domicile/scope: Liability depends on heir's residence; irrelevant for children (exempt).
• JSON: basis 'beneficiary', children 'fully_exempt', exemption 0 EUR, brackets none, other transfer cost 0%.
• Surviving spouse: exempt from inheritance tax regardless of value.

Wealth tax

• Rule in force: No net wealth tax and no recurring levy on financial assets. From 2026 real estate tax became progressive on residential property (see property note), which is a property tax, not a wealth tax.
• Confidence: high, verified.
• Property taxes (not a wealth tax): From 2026: primary residence taxed only above EUR 450,000 per owner (EUR 900,000 for two co-owners) at 0.1-1% set by the municipality; other residential property taxed progressively 0.2%-1.0% above EUR 50,000 (1.0% above EUR 1,000,000); commercial 0.5-3% plus a 0.2% defence component.
• JSON: type 'none'.

Special regimes

None. No special tax regime for newly arriving wealthy individuals was found; only ordinary residence (JSON regime 'standard').

Company taxation (kept separate from personal tax)

• Headline CIT 17%. Standard CIT rose from 16% to 17% from 2026 (reduced rate 7%; 0% for the first two years for small new companies). Annual profit taxation. Participation exemption for dividends (10%/12 months). New loss-utilisation limits on reorganisations.

Cost of living notes

City: Vilnius.

• Prime family-home rent (monthly): EUR 2,400 (2026). Median of the 8 priced houses for rent in and around Vilnius in Baltic Sotheby's International Realty's rental list on 15 Oct 2026 (EUR 1,700-4,700; Antakalnis new-build 226 m² 4 bedrooms EUR 4,700, Antakalnis 140 m² EUR 3,900, golf-course villas in Vilnius district 125-345 m² EUR 1,700-2,600, several already let). The four homes with 4-5 bedrooms also have a median of EUR 2,400. Thin sample: the main portals (Aruodas, Domoplius, Skelbiu) blocked automated access. Checked 2026-10-15 against the upper-middle-class standard. Source: Find a property - for rent (houses), https://lt.balticsothebysrealty.com/en/find-a-property/?action=rent&type=house
• International school (annual, per child): EUR 26,847 (2026). American International School of Vilnius, Grades 11-12, 2026-2027: tuition EUR 24,349 plus annual capital fee EUR 2,498. New students pay a one-time EUR 2,707 admission fee and a EUR 428 application fee. Source: Tuition fees and payment policy, https://www.aisv.lt/tuition-fees-and-payment-policy/

Prime purchase price per m², family health insurance and housekeeper cost were not sourced in this round and are omitted rather than guessed. Rent is low-confidence (8 listings from one agency).

Open questions

• Whether ETF units of foreign (e.g. Irish UCITS) funds count as 'units' (pajai) for the 5-year 15% rule is assumed (yes), not confirmed in a VMI text.
• Average-wage thresholds are preliminary (KPMG gives EUR 82,962/138,270; PwC EUR 83,237/138,729).
• PIT exemption for gifts from close relatives not confirmed in a source opened during this research.
• Notary fees for the certificate of inheritance not verified (assumed small).

• Holding structures (2026-10-16): a Lithuanian UAB holding company was considered and not added as a regime. Its profit is taxed every year at 17%, not on distribution; gains on shares are exempt only for a stake above 10% held at least two years (PwC), so a diversified portfolio's gains and non-EEA dividends would be taxed at 17% inside the company, then dividends again at 15% on payout. It is never better than direct holding, and no source shows advisers recommending it for a listed portfolio. A private foundation or trust was not researched.
• Health insurance (PSD, 6.98%) on dividends and gains of an individual was searched for and not found in any source read; the file assumes none applies to these items.
• Needs an engine change (see data/recipes/LTU.json): the investment account (withdrawals above contributions taxed at 15%).

Sources

• Lithuania - Individual - Income determination
• Lithuania - Individual - Taxes on personal income
• Lithuania: Tax changes starting 2026 (KPMG TaxNewsFlash, 4 Dec 2025)
• Mokesčių naujienos 2026 (tax news 2026, EN)
• Lithuania - Individual - Foreign tax relief and tax treaties
• Lithuania - Individual - Other taxes
• Successions in Europe - Lithuania
• Lithuania - Individual - Residence
• Lithuania - Corporate - Withholding taxes
• Mokesčių ir teisės naujienlaiškis, 2026 kovas (VMI clarification on GPMĮ art. 6(6)(3)): https://kpmg.com/lt/lt/izvalgos/mokesciu-ir-teises-naujienlaiskiai/2026-kovas.html
• Find a property - for rent (houses): https://lt.balticsothebysrealty.com/en/find-a-property/?action=rent&type=house
• Tuition fees and payment policy: https://www.aisv.lt/tuition-fees-and-payment-policy/

Change log

• 2026-10-15: initial research.
• 2026-10-15: confirmed conditions of the 15% rate on shares held over 5 years (KPMG LT / VMI, March 2026); added Vilnius cost of living (Baltic Sotheby's rent sample, AISV 2026-27 fees).
• 2026-10-15: family rent re-checked against the upper-middle-class standard: kept.
• 2026-10-16: added surviving-spouse treatment.
• 2026-10-16: no change to rates; recorded why a UAB holding company is not modelled, the unchecked PSD question, and the investment account engine gap; wrote the projection recipe data/recipes/LTU.json.