The Lithuanian Ministry of Finance has announced tax measures, on 16 April 2025, which propose raising the standard corporate income tax rate (CIT)Â from 16% to 17% and the reduced rate from 6% to 7%. The changes are expected to generate EUR 111.5 million in additional annual revenue.
The proposals are open for public and stakeholder consultation until 2 May 2025. If approved by the Seimas, the legislative changes shall take effect on 1 January 2026.
The reform package aims to increase state and municipal budget revenues by EUR 248.7 million in 2026 and EUR 624.6 million in 2027. It also includes plans to allocate EUR 306 million in 2026 and EUR 523.6 million in 2027 to the State Defence Fund.
Other proposed measures affecting businesses include:
- Allowing full depreciation of long-term assets, including equipment, IT hardware, and software, in the year they are put into use.
- Extending the 0% corporate tax rate for newly registered companies from one year to two years.
- Allowing companies to deduct scholarships of up to EUR 2,500 per year paid to STEM students and researchers under tripartite agreements as allowable expenses.
- Including employer-paid voluntary health insurance contributions in the taxable wage base, while retaining corporate deductibility.
Additional revenue sources proposed include:
- A 10% Security Contribution on non-life insurance premiums, excluding mandatory motor third-party liability insurance for individuals, projected to raise EUR 110 million annually.
- Excise duties on sweetened and energy drinks, range from EUR 7.4 to EUR 105 per hectolitre depending on sugar content and product type.
The Ministry also proposes changes to VAT:
- Reducing the preferential VAT rate for books and non-periodical publications from 9% to 5%.
- Increasing the reduced 9% VAT rate on other goods and services to 12%.
- Eliminating the VAT discount for heating, with adjustments to heating compensation eligibility.
