Whether Lithuania taxes a salary paid in Berlin, a flat let in Warsaw or a dividend from a Dublin fund turns on one prior question: are you a Lithuanian tax resident. A resident is taxed on worldwide income; a non-resident only on Lithuanian-source income. There is no third category, and no version of the test that depends on where the money is paid or which passport you hold.
Being taxed twice is prevented by machinery — treaties, and the relief in the Law on Personal Income Tax. But relief attaches to a declared figure: income that is not on the return has nothing to relieve.
Table of Contents
The Residency Test
Article 4 of the Law on Personal Income Tax (Gyventojų pajamų mokesčio įstatymas, GPMĮ) sets out the tests. They are alternatives, not cumulative: any one of them in a calendar year makes a person a permanent resident.
A permanent place of residence in Lithuania
Somewhere available to live in on a settled basis. A factual test about a home, not a declared address, though a declared residence is evidence of one.
The centre of personal, social and economic interests here
More of them here than abroad — family, working life, assets. The Law weighs them together rather than counting them.
More than 183 days in the calendar year
Continuously or with breaks; the total across the year is what counts.
280 days across two consecutive years, with 90 in one of them
The rule that catches people who plan around the first one.
A fifth limb applies only to Lithuanian citizens: a citizen whose salary or living costs are paid from the Lithuanian budget is a resident wherever they physically are. And the two-year rule is the one most often missed, because it is the only test that reaches backwards.
Count from the day you arrive, not from the day you decide
Residency is settled by facts that have already happened, so keep flight and border evidence from the first arrival. The day count is the only test that can be proved arithmetically — and the only one anybody will ask you to prove.
Resident of Two Countries at Once
Nothing stops two states each concluding, under their own law, that the same person is resident. A treaty settles the conflict with a tie-breaker applied in order: the first limb that gives a clear answer decides.
| Order | Test | What it looks at |
|---|---|---|
| 1 | Permanent home available | Whether a home is at the person's disposal in one state or in both |
| 2 | Centre of vital interests | Where personal and economic relations are closer, if a home is available in both |
| 3 | Habitual abode | Where the person actually lives, if the first two do not resolve it |
| 4 | Nationality | Where neither habitual abode nor a home settles it |
| 5 | Mutual agreement | The two tax administrations decide between themselves |
It allocates residence for treaty purposes only, does not amend domestic law, and relief that depends on it must be claimed with a certificate. Without a treaty there is no tie-breaker, and dual residence simply persists.
The Worldwide Rule
A Lithuanian tax resident is taxed on income received anywhere in the world. The source country, the currency, the account it lands in and whether it is ever brought here are all irrelevant.
The rates are the ordinary ones. Foreign employment income joins the same progressive scale — 20% to €83,237, 25% to €138,729, 32% above — and foreign rent, capital gains and other non-employment income sit in the class taxed at 15% up to €27,746 and then on those same bands. See the income tax page.
Exemption or Credit, and the Credit Limit
Article 37 of the GPMĮ eliminates double taxation two different ways, depending on the income.
Exemption — income from a treaty state, other than three categories:
- Income taxed in a state Lithuania has and applies a treaty with is not taxed again here.
- It still goes on the Lithuanian return: relief applies to a declared figure, not an omitted one.
- Proof that the foreign tax was paid is a condition. Without the document there is no relief.
Credit — dividends, interest and royalties, and non-treaty states:
- The Lithuanian tax is computed first, then the foreign tax paid is deducted from it.
- The deduction is capped: foreign tax above the Lithuanian tax on that income is lost.
- Where a treaty caps the source-country rate, only up to that rate is creditable.
A dividend taxed at 25% abroad and at 15% here relieves 15%; the rest is a cost of the source country. The credit is computed income by income rather than pooled, so an excess on one source cannot cover a shortfall on another.
Three refinements. Income the source state did not tax is taxed in full here — the exemption limb responds to tax actually paid, not to the right to charge it. Income the source state exempted under its own personal allowance is treated as taxed, and relieved accordingly. And no credit is given for tax paid in a jurisdiction on the Minister of Finance's list of target territories.
Foreign Employment Income
Under the standard treaty rule, salary for work physically performed abroad is taxable in the state where the work was done, and article 37 then removes the Lithuanian charge on it. The conditions are cumulative, and each fails in practice for somebody:
The work was performed in the foreign state
Physically. Sitting in Vilnius on a foreign payroll is not work performed abroad.
That state had the right to tax it under the treaty
Short assignments can fall the other way: the taxing right returns to the residence state where the stay is short, the employer is not of the host state and no permanent establishment bears the cost.
Income tax was actually paid there
A right to tax that was not exercised produces no relief: where the foreign state charged nothing, Lithuania charges in full.
You hold the document proving it
A statement of the income and tax withheld, from the employer or another person in that state. For a non-treaty state, VMI requires the foreign administration's own certified document, and without it there is no right to relief.
The document requirement is where an otherwise correct return fails: the relief is refused, and the difference lands as an assessment for the whole Lithuanian tax. Ask the foreign employer for the annual statement before you leave, not in the following April.
Rent, Dividends, Interest and Pensions
The relief method changes with the category, so one line of the return can be exempted and the next credited.
| Foreign income | Where it is taxable first | Relief in Lithuania |
|---|---|---|
| Employment income | The state the work was performed in | Exempt, where a treaty state taxed it and you can prove it |
| Rent from foreign property | The state the property is in | Exempt on the same conditions |
| Dividends | The source state, at a treaty-capped rate | Credit against the flat 15%, capped at it |
| Interest | The source state, at a treaty-capped rate | Credit, on the same limit |
| Royalties | The source state, at a treaty-capped rate | Credit, on the same limit |
| Sale of foreign property | Usually the state it is situated in | Exempt after five years' ownership in Lithuania or the EEA; otherwise the non-employment class |
| A state pension from abroad | Varies with the treaty | Non-taxable under article 17(1)(17) |
The Treaty Network and the Certificates
The Ministry of Finance publishes the table of Lithuania's double taxation treaties — 60 rows, each with the dates of ratification and entry into force. Two are dead letters: VMI records Russia and Belarus as no longer applied from 1 January 2026, so income from either is relieved, if at all, on the non-treaty basis. Claiming under a treaty means proving where you are resident, and each direction has its own form.
| Form | Lithuanian name | Who uses it, and for what |
|---|---|---|
| FR0254 (DAS-4) | Lietuvos rezidento rezidavimo vietą patvirtinanti pažyma | VMI's certificate that you are a Lithuanian resident, given to the foreign payer or tax authority so they apply the treaty rate. |
| FR0021 (DAS-1) | Užsienio valstybės rezidento prašymas sumažinti išskaičiuojamą mokestį | A foreign resident's request to withhold Lithuanian tax at the treaty rate. |
| FR0022 (DAS-2) | Prašymas grąžinti išskaičiuotą mokestį | A claim to repay Lithuanian tax withheld above the treaty rate. |
| FR0023 (DAS-3) | Prašymas dėl mokesčių lengvatų taikymo | The third treaty-relief form in the series, used alongside DAS-1 and DAS-2. |
FR0254 is requested through Mano VMI — Paslaugos → Pažymos — or at a VMI office, and issued within 5 working days. Get it before the foreign payer's deadline: DAS-1 stops over-withholding, DAS-2 only recovers it afterwards, and the second route is much slower.
A certificate is not a residency decision
FR0254 states that Lithuania regards you as its resident. It does not stop the other country doing the same, and it does not resolve a conflict — that is the tie-breaker's job. Certificates from two states are evidence of the problem, not a solution.
The Remote Worker and the e-Resident
Working remotely from Lithuania for a foreign employer does not keep you outside the Lithuanian tax. Meet the day count or the centre-of-interests test and you are a resident, whoever the employer is. Because the work is physically performed here, the standard treaty article gives Lithuania the taxing right too, so the exemption limb of article 37 has nothing to bite on. A foreign employer with no Lithuanian presence usually does not withhold, so the resident declares and pays it themselves.
Lithuanian e-residency is a digital identity, not a tax status: no residence right, no day count, no exemption. Nor does it stop one — an e-resident who spends more than 183 days here is a resident on the ordinary test. Owning a Lithuanian company changes nothing either: the company pays corporate income tax, and the owner pays the flat 15% on distributions, wherever resident. See e-residency.
Declaring It, Even Where Nothing Is Due
VMI's position is unqualified: every permanent resident who received income from a foreign state must file the annual return, the only carve-out being non-taxable income that need not be declared.
The filing obligation is independent of the payment obligation: exempt foreign salary, a fully credited foreign dividend and income taxed abroad at a higher rate all go on the return. Relief is granted against a declared figure; an omitted one is an omission.
The statutory date is 1 May of the following year, rolling to the next working day where 1 May is not one; two other dates catch people moving in or out, and the tax return page sets out both. Residents file GPM311, and foreign income has its own annex.
Frequently Asked Questions
How do I know if I am a Lithuanian tax resident?
Article 4 of the Law on Personal Income Tax sets four alternative tests, and any one of them in a calendar year is enough: a permanent place of residence here; the centre of your personal, social and economic interests here; more than 183 days here in the year; or 280 days across two consecutive years with at least 90 in one of them. A fifth limb makes a Lithuanian citizen paid from the Lithuanian budget a resident wherever they are.
I stayed under 183 days. Am I safe?
Not necessarily. The two-year rule is independent: 280 days across two consecutive years with 90 in one of them makes you a resident though neither year exceeded 183. And the home and centre-of-interests tests do not involve days at all.
What happens if two countries both say I am resident?
A treaty between them resolves it with a tie-breaker in fixed order — permanent home available, centre of vital interests, habitual abode, nationality, then mutual agreement — and the first limb that answers decides. It allocates residence for treaty purposes only, and relief must still be claimed with a residency certificate. Without a treaty there is no tie-breaker.
Does Lithuania use the credit method or the exemption method?
Both, under article 37. Income received in a treaty state and taxed there is exempt here, with proof of the foreign tax as a condition. Dividends, interest and royalties get the credit method instead, as does income from states with no applicable treaty.
What is the credit limit?
The foreign tax deducted cannot exceed the Lithuanian tax on that same income; article 37 says so directly, and the excess is not refunded. Where a treaty caps the source-state rate, only up to that rate is creditable, and the calculation is income by income rather than pooled. No credit is given for tax paid in a jurisdiction on the Minister of Finance's target territories list.
My foreign salary was already taxed abroad. Do I pay again in Lithuania?
Generally not, if four conditions are met together: the work was physically performed in the foreign state; that state had the right to tax it under the treaty; income tax was actually paid there; and you hold a document showing the income and the tax withheld. A right not exercised gives no relief. For a non-treaty state, VMI requires the foreign administration's certified document.
How is foreign rental income treated?
Rent is taxable first where the property is, and where that state taxed it the employment-income relief applies — but it still goes on the return. A sale is different: the gain is exempt where immovable property in Lithuania or the EEA has been owned five years or more, and otherwise sits in the non-employment class.
How are foreign dividends, interest and a foreign pension taxed?
Dividends are taxed at a flat 15% and are not added to other income for rate purposes; foreign tax is credited against that 15%, capped at it and at the treaty rate. Interest and royalties follow the same credit on the same limit. A foreign state pension is non-taxable under article 17(1)(17), which does not depend on the source state having taxed it.
Which certificate proves I am a Lithuanian tax resident?
Form FR0254, also numbered DAS-4 — Lietuvos rezidento rezidavimo vietą patvirtinanti pažyma. Request it through Mano VMI or at a VMI office; it is issued within 5 working days. Running the other way: FR0021 (DAS-1) asks for withholding at the treaty rate, FR0022 (DAS-2) claims back tax over-withheld, and FR0023 (DAS-3) is the third form in the series.
How many treaties does Lithuania have?
The Ministry of Finance table runs to 60 rows, each with the treaty's ratification and effective dates. Two no longer operate: VMI records Russia and Belarus as not applied from 1 January 2026, so income from either is relieved on the non-treaty basis — credit rather than exemption — if at all.
Do I have to declare foreign income if no Lithuanian tax is due?
Yes. VMI states that every permanent resident who received income from foreign states must file the annual return, excepting only non-taxable income that need not be declared. Both relief methods operate on a declared figure.
I live in Lithuania and work remotely for a foreign employer. What do I owe here?
If you meet any residency test the foreign salary is in scope, however foreign the employer or the account. The work is performed in Lithuania, so the treaty gives Lithuania the taxing right and the exemption has nothing to attach to. A foreign employer with no Lithuanian presence normally does not withhold, so you declare and pay it yourself. E-residency changes nothing.
Disclaimer
This is general information, not tax advice. Rates, thresholds and treaty positions change — verify against VMI, the State Tax Inspectorate, or consult a qualified Lithuanian tax adviser before making decisions.