The State Tax Inspectorate has released draft commentary on the personal income tax rules that apply from 2026, including new progressive rates of 20%, 25% and 32%.
Lithuania’s State Tax Inspectorate published draft commentary on 28 September 2026 explaining the personal income tax rules that apply from 2026. Dated 28 September 2026, it is available on the State Tax Inspectorate website: document one and document two.
Under Article 6 of the Personal Income Tax Law (GPMĮ), general annual aggregated income is taxed at 20% up to 36 average monthly wages (VDU), or EUR 83,237.40 for 2026. The rate is 25% between 36 and 60 VDU, or EUR 83,237.40 to EUR 138,729.00, and 32% above 60 VDU.
For individual activity, taxable income of up to EUR 20,000 is effectively taxed at 5% through the personal income tax credit. The effective rate rises gradually to 20% for taxable income up to EUR 42,500. Above EUR 42,500, the credit is zero and the whole amount is taxed under the general progressive rates.
The commentary also explains how different income categories are aggregated. Certain non-employment and individual activity income is taken into account before other income, such as employment income, when the progressive brackets are applied.
Comments on the draft commentary may be submitted until 9 October 2026.
