Lithuania Considers Tax Reforms: Impact on Corporate and Personal Income

Lithuania is considering several tax reforms that could impact both corporate and personal income. The proposed changes aim to increase state and municipal budget revenues, with a portion earmarked for national defense. These reforms are scheduled for further discussion in the Seimas (Parliament) in the coming weeks. The proposed tax package includes a sugar tax on sweetened beverages and potential changes to VAT exemptions. A standard VAT rate of 21% may replace the current 9% rate on heating, hot water, and firewood. Conversely, the preferential VAT rate for books and non-periodical publications could decrease from 9% to 5%. Corporate tax rates may increase by 1 percentage point, setting the standard rate at 17% and the preferential rate at 7%. Progressive personal income tax rates are also under consideration, with rates of 20%, 25%, and 32% depending on income levels. Certain income types, such as dividends and long-held stock sales, may be subject to a 15% tax rate under specific conditions.