[ESTABLISHING A BUSINESS ENTITY IN LITHUANIA] 324
Lithuania with the monthly earnings in total at least 2 monthly average wages (gross); (iii) equity value of the company must be not less than EUR 28,000 and the foreigner's invested part should be not less than EUR 14,000. Employment in Lithuania – it is mandatory to apply for a temporary residence permit. An application for the issuance of the temporary residence permit must be submitted to any migration office in the territory of Lithuania (prior submission of an application and registration for migration services online through the Lithuanian Migration Information System (MIGRIS) is required). The lodging of such application is not entitling a foreigner to stay in the territory of the Republic of Lithuania before the application is examined, and a decision is taken. The same applies when lodging an application for the replacement of a temporary residence permit. The application for the issuance of the first temporary residence permit must be considered not later than within three months from the lodging of the application with a relevant institution (exceptions are applied for highly qualified employees, start- up founders or shareholder who invested not less than EUR 260,000, etc.), whereas an application for the replacement of a temporary residence permit – not later than within two months from the lodging of the application. 4.5 Amendments to tax laws Lithuania’s Parliament has adopted amendments to tax laws that will come into force on January 1, 2026. Here is a brief overview of what is important and what to expect next year.
4.5.1 Changes to the Personal Income Tax Law The amendments introduce progressive taxation that when calculating personal income tax, all resident's annual income will be added together and taxed at three rates: • 20 % - for income up to 36 times the average wages in Lithuania • 25 % - for income between 36 and 60 average wages
• 32 – for income above 60 average wages
Exceptions where certain types of income of a resident are taxed at a fixed PIT rate of 15% (this income is not added up and is not included in the total annual income):
Income
from
distributed
profits
•
(dividends);
• Sickness, maternity, paternity, childcare, and long-term work benefits; • Income from the sale of shares, if the shares were not purchased through an investment account and were held for more than 5 years prior to their transfer;
Life insurance benefits;
•
Pension fund benefits;
•
• Income received through an investment account (PIT is calculated only when the money is withdrawn); • Income from shares granted by an employer or a person related to the employer under option agreements and held for 3 years from rights to acquire shares date. 4.5.2 Changes to the Law on Corporate Income Tax • Standard corporate income tax rate will be increased from 16 % to 17 %;
ILN Corporate Group – Establishing a Business Entity Series
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