Lithuania’s 2026 draft Budget proposes halting the planned increase in CO2 excise duty on diesel and introducing a corporate tax exemption for the National Development Bank.
Lithuania’s Ministry of Finance has presented the 2026 draft Budget to the parliament for review on 21 October 2025. Among the key proposals, the government plans to halt the previously scheduled increase in the excise duty on the CO2 component of diesel fuel. Additionally, the draft includes a corporate tax exemption specifically for the National Development Bank (NPB).
The proposed legislation includes several documents, including draft amendments to the Law on Excise Duties and changes to the Law on Corporate Income Tax.
Corporate Income Tax Law Modifications
The Lithuanian government has introduced changes to the Corporate Income Tax (CIT) Law No. IX-675, specifically targeting Article 3. The amendment expands the list of tax-exempt entities and clarifies their treatment under corporate taxation rules. The revised provision now explicitly includes the Public Institution “Deposit and Investment Insurance” and adds the National Development Bank to the exempted list.
By recognising the National Development Bank as a tax-exempt entity, Lithuania is aligning its fiscal structure with broader EU state-aid regulations.
Excise Duties Law Modifications
The Lithuanian government has introduced amendments to the Excise Duty Law (IX-569), primarily aimed at adjusting the carbon dioxide (CO2) component in fuel taxation from 2026 to 2030.
Under the revised structure, excise taxes will now consist of two elements:
- A fixed base amount (e.g., EUR 500 per 1,000 litres for certain energy products), and
- A variable CO2 component, which gradually increases through 2030.
For example, the CO2 element for diesel will rise from EUR 53.6 in 2026 to EUR 157.2 per 1,000 litres by 2028, remaining stable thereafter.
The current excise duties on diesel fuel in Lithuania include two components: a fixed rate of EUR 466 per 1,000 litres and a variable CO2-related charge of EUR 53.6 per 1,000 litres. This CO₂ element is set to increase to EUR 104.8 per 1,000 litres in 2026.
However, as mentioned above, the government has proposed halting the planned hike and maintaining the current rate of EUR 53.6 per 1,000 litres.
The amendments will come into effect as of 1 January 2027 upon adoption.
