[ESTABLISHING A BUSINESS ENTITY IN LITHUANIA] 318
wage) is subject to taxation at a rate of 32%); • social insurance tax (19,5%); • pension saving contributions (3% or if the employee decides to additionally save for a pension in pillar 3 of pension accumulation system, employee can set the percentage of savings individually. The employer shall pay in addition the social insurance tax (1,77% in case the employee is employed for unlimited term, 2,49% in case the employee is employed for a fixed term). The amount of 60 average wages (EUR 101,094) shall be calculated in accordance with the annual income as provided below: income related to an employment relationship or other relationship that corresponds to the employment relationship; • • bonuses and remuneration for the activities at the supervisory board, management board or the loan committee; • income received from the employer under the copyright agreements; • income received by the heads of small partnerships who are not members of those small partnerships under a civil (service) contract for the management activities. 4.2 Taxation of Non-Residents The income tax base of non-resident individuals is worldwide income derived through a fixed base maintained in Lithuania,
if any, and the following types of income from Lithuanian sources: • employment income; • distributed profits, including dividends; • any payments made to members of the board or the supervisory board; • interest; • royalties; • income from the lease of immovable property located in Lithuania; • income from the disposal of immovable property located in Lithuania or movable property that is subject to mandatory registration in Lithuania; • income from sports and entertainment activities; and • compensation for violation of copyright or similar rights. The general flat rate of personal income tax is 15%. However, the share of annual income exceeding EUR 202,188 is subject to a 20% rate. Employment-related income and payments made to members of the board, or the supervisory board are subject to taxation at a rate of 20%, any portion exceeding EUR 101,094 is subject to taxation at a rate of 32%. Income from distributed profits and individual activities derived through a fixed base maintained in Lithuania is subject to a 15% rate. 4.3 Harmonization with EU Tax Legislation The Lithuanian tax system is harmonized with EU tax legislation.
ILN Corporate Group – Establishing a Business Entity Series
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