Investing in Lithuania: The Investment Account Explained

What the Deferral Is Actually Worth

Tax deferral sounds abstract. Here's what it does to real numbers — the same contributions, the same returns, the only difference being whether gains are taxed as you go or at the end.

What this comparison assumes

The "taxed as you go" column models an investor who realises gains each year — by rebalancing, switching funds, or holding distributing funds. If you buy a single accumulating ETF and never touch it, an ordinary account defers tax too, and the gap narrows considerably. The investment account's real advantage is freedom to change your mind without a tax bill. Returns are illustrative, not a forecast.

The Investment Account Explained

The regime has operated since 2025. The mechanism is simple enough that it's worth stating plainly.

How it works

1. You designate an account as an investment account

   Either the broker flags it, or you designate it yourself when declaring.

2. You pay money in

   Everything you deposit is tracked as contributions.

3. You invest, sell, switch, rebalance — freely

   None of this triggers tax. Gains and losses net off inside the account.

4. Tax arises only when you take money out

   And only once cumulative withdrawals exceed cumulative deposits. Below that line, you're withdrawing your own capital.

5. 15% GPM on the excess

   Flat rate, separate from the progressive employment income scale.

Worked example

You deposit €10,000 in 2025. By 2026 the portfolio is worth €12,000. You sell everything and buy different funds — VMI asks for nothing, because you haven't withdrawn. If you later take out €10,000, still nothing is taxable, because you haven't exceeded what you put in. Take out €13,000 and the €3,000 above your contributions is taxed at 15%.

Why the flat 15% matters more from 2026

The rate in that last line used to be unremarkable. It is now the strongest argument the regime has. From 2026, employment and self-employment income moved onto a progressive scale reaching 25% and 32%. Investment account gains stay outside that, at a flat 15%. For anyone with a decent salary, that gap is now larger than it used to be — see our income tax guide.

The €500 Trade-Off

There is one thing you give up, and honest guides should say so.

Outside the investment account regime, Lithuania applies an annual GPM exemption on investment income — commonly cited at €500 a year. Inside an investment account, that exemption does not apply.

An investment account is better if…

• You're investing for the long term
• You expect gains well above €500/year
• You want to rebalance or switch funds
• You're reinvesting rather than drawing income

An ordinary account may be better if…

• Your annual gains are small
• You're realising under €500/year
• You want simplicity above optimisation
• You're drawing income now, not accumulating

Confirmed with an accountant: the €500 annual capital gains exemption does not apply to withdrawals from an investment account. If you're used to relying on it, it doesn't carry over into the IS regime.

Which Brokers Support the Investment Account

This is the practical question, and it's where most people get stuck. Not every broker supports the regime, and support means different things.

Last updated July 2026. Broker treatment of the IS regime is evolving — confirm directly with the provider before opening.

The real choice: convenience or cost

Lithuanian banks flag the account as IS, report your status to VMI, and give you an annual statement in Lithuanian with FIFO profit-and-loss worked out. Declaration becomes close to automatic. Foreign brokers are usually cheaper with far more choice, but they don't report to VMI — you must track every deposit and withdrawal yourself and get the declaration right. Neither is wrong; know which trade you're making.

The three positions, in full

Each of the rows above is really one of three positions. These are the same three providers, with what the table says about them set out card by card.

Trading 212

Eligible, but the records are yours

IS regime: EligibleReports to VMI: NoAdmin burden: You track it

Open account

Key highlights

Best for: a cheap EEA brokerTrading 212 Markets Ltd — CySEC 398/21Trading 212 EU GmbH — BaFin 10109603Investor compensation 90%, capped at €20,000

Key features

• Eligible for the investment account regime
• Simple interface if the entity is EEA
• Cheaper, with more choice than a bank

Account details

IS regime

Eligible

Reports to VMI

No

Admin burden

You track it

Summary

• Eligible for the investment account regime
• Simple interface if the entity is EEA
• Cheaper, with more choice than a bank
• No VMI reporting, no IS-format statement
• You track every deposit and withdrawal yourself

Revolut

Eligible on paper, spoiled by withdrawals

IS regime: Self-designateReports to VMI: NoAdmin burden: You track it

Key highlights

Best for: stock already held hereRevolut Securities Europe UAB, code 305799582Bank of Lithuania supervisedNo compensation amount published

Key features

• Eligible: a Lithuanian firm, Bank of Lithuania
• You designate the account yourself

Account details

IS regime

Self-designate

Reports to VMI

No

Admin burden

You track it

Summary

• Eligible: a Lithuanian firm, Bank of Lithuania
• You designate the account yourself
• No investicinė sąskaita classification
• Withdrawals land in your spending IBAN
• A spending account cannot be declared

Revolut carries no button here on purpose. We recommend it for banking and not for this, and it is the one row of the table above with no “Open” link.

Investing Through Revolut

Revolut is eligible, but it gives you none of the scaffolding. It does not classify the account as an investicinė sąskaita or produce an IS-format annual statement, so the record-keeping is entirely yours — as it is with any foreign broker. The Revolut-specific catch is the withdrawal path.

Eligibility is not the issue. Revolut Securities Europe UAB is a Lithuanian firm supervised by the Bank of Lithuania, and under VMI's rules you designate an account as an investment account — no broker has to offer it as a product.

The practical catch is that money withdrawn from Revolut brokerage lands in your Revolut IBAN, which for most people is also the account they spend from. An account used for daily spending cannot be declared as an investicinė sąskaita. If you invest through Revolut, that money has to stay strictly separate from your spending balance, and moving it to another broker's investment account means exiting the regime first.

We recommend Revolut throughout this site for banking — Lithuanian IBAN, opens with just a passport, the best first account for a new arrival. For investing it is workable but high-maintenance.

Accumulating vs Distributing ETFs

A distinction that matters everywhere, but interacts with the IS regime in a way worth understanding.

Inside an investment account, accumulating funds fit the logic particularly well: nothing leaves the account, nothing is realised, nothing is taxed until you withdraw. Distributing funds pay cash out, which complicates the picture.

Hold accumulating ETFs and the dividend question disappears

Accumulating funds — VWCE, CSPX, IWDA and similar — reinvest dividends internally at fund level, so nothing ever lands in your account as a distribution. No foreign withholding to reclaim, no manual tracking, nothing extra to declare.

Sources genuinely conflict on how dividends received into an investment account are treated, and if you plan to hold distributing funds you should ask an accountant. Everyone else can sidestep it entirely.

How to Declare It

The investment account is declared through your annual income declaration.

• Lithuanian banks report your IS status and provide the figures — the declaration is largely pre-filled
• Foreign brokers require you to designate the account yourself on the declaration form, and to supply your own deposit and withdrawal totals
• Keep records of every deposit and withdrawal from day one. The entire regime rests on the in-versus-out figure, and reconstructing years of flows retrospectively is miserable
• Declaring an investment account buys you extra time: 1 June 2026 rather than the 4 May general deadline, for both the declaration and any payment — see our tax return guide

Start the spreadsheet on day one. If you use a foreign broker, the single most useful thing you can do is keep a running log of money in and money out, dated. It takes seconds per transaction and saves you a genuinely unpleasant afternoon years later.

Freedom24 — Regulatory History

Worth knowing before you choose a long-term custodian. The Cyprus entity you'd actually hold an account with is CySEC-licensed and client assets are covered by the Cyprus investor compensation fund up to €20,000, as at any EU broker. It has previously settled with CySEC for €50,000 over potential anti-money-laundering shortcomings in customer due diligence.

Separately, the US-listed parent — Freedom Holding Corp (NASDAQ: FRHC) — has received SEC subpoenas concerning settlement practices, relationships with institutional market-maker customers of its non-US subsidiaries, and internal controls around the internalisation of US securities trades. The company and its chairman and chief executive have received Wells notices, meaning SEC staff have made a preliminary determination to recommend enforcement action. This is not a finding of wrongdoing and the matter is unresolved. We mention it because it is the sort of thing you would reasonably want to know before moving a portfolio somewhere for a decade — not as a reason to avoid the platform.

The Exact Legal Name Each Broker Needs

The GPM311 form demands the broker's exact registered legal name, not the brand — "Trading 212" will be rejected. Copy these precisely:

Trading 212 users need to check which entity holds their account, because it has changed twice. Look in the app under Settings → Account Information. Different entity, different GPM311 entry.

What the forms actually are

• GPM311 registers the account — filed once, by 1 May of the following year
• An account opened in 2026 is declared by 1 May 2027
• GPM303, annex R is where the actual gains go, filed with your annual return

No broker does this for you — not even the Lithuanian banks. They report that the account has investment-account status; they do not report your transactions or complete your return. The banks' advantage is a clearer statement in your own language, not automation. Anyone who tells you a Lithuanian bank "handles the tax" has misunderstood.

Four Mistakes to Avoid

The account only works as a tax wrapper if you run it correctly. Four things commonly go wrong, and each one costs you the deferral. They are independent of each other, not stages — any one of them alone is enough.

• Not filing GPM311. The account only becomes an investicinė sąskaita when you declare it — by 1 May of the following year.
• Mixing personal spending through it. Withdrawals for anything other than reinvestment count as taxable events.
• Using the wrong legal name. The entity on the form must match the broker's registered name exactly — see above.
• Assuming your broker handles it. None of them do, including the Lithuanian banks. They report status, not your return.

Pillar II and III Pensions

Investing in Lithuania isn't only brokerage accounts. Two pension pillars sit alongside:

• Pillar II — an optional additional 3% contribution alongside Sodra, invested in a pension fund on your behalf. Our salary calculator lets you model the effect on take-home pay
• Pillar III — voluntary private pension contributions, which attract income tax relief

The Pillar III relief works as a deduction of 25% of your taxable income, capped at €1,500 a year, and that cap is shared with life insurance premiums — it is one €1,500 allowance across both, not €1,500 each. One caveat you should carry into any planning: the VMI leaflet setting this out is undated and its worked examples are from 2023, and VMI publishes no confirmation that the relief survives the 2026 GPM reform unchanged. Check the current figure with VMI before you size a contribution around it.

How to Actually Start

1. Sort your residency and banking first

   You'll need an asmens kodas for a Lithuanian bank brokerage account.

2. Decide: convenience or cost

   Local bank with automatic VMI reporting, or foreign broker with lower fees and more work.

3. Confirm the account is designated as an investment account

   Don't assume. Ask explicitly, and get it in writing if you can.

4. Start your deposit and withdrawal log

   Especially with a foreign broker. Day one.

5. Choose broad, low-cost funds

   Most long-term investors are best served by diversified index funds rather than stock picking. Nothing about the Lithuanian regime changes that.

6. Automate contributions and leave it alone

   The regime rewards not touching it.

7. Declare annually by 1 June

   Investment account declarants get until 1 June 2026, a month past the 4 May general deadline. File even in years when nothing is taxable.

What Can Go Wrong

Investments lose money. Everything above concerns tax treatment, not returns. Markets fall, sometimes for years. The 7% in the calculator is an illustration drawn from long-run historic averages, not a forecast, and your actual outcome could be substantially worse — including losing capital. Never invest money you may need in the near term.

Assuming your broker supports the regime

Revolut doesn't. Others vary. Confirm before you commit money.

Losing track of deposits and withdrawals

With a foreign broker, this is the whole basis of your tax position. Reconstruct it later at your peril.

Optimising tax at the expense of everything else

A tax-efficient wrapper around a bad portfolio is still a bad portfolio. Get the investment approach right first.

Forgetting the €500 exemption trade-off

For small annual gains, the ordinary regime may genuinely be simpler and no worse.

Not declaring

The declaration obligation exists whether or not tax is due.

Currency and platform risk

Understand where your account is held, in what currency, and what protection applies.

Frequently Asked Questions

Related Guides

Being plain about the risk is half of it. Being plain about the money is the other half.