Important: the reduced rates changed on 1 January 2026. The old 9% reduced rate was abolished and replaced by two reduced rates — 12% and 5%. If you're reading guidance written before 2026, including much of what's still online, it will be wrong on this point.
Table of Contents
The Rates
VAT — pridėtinės vertės mokestis, PVM — is Lithuania's consumption tax. Four rates apply.
| Rate | Applies to |
|---|---|
| 21% | Standard rate — most goods and services |
| 12% | Accommodation services, passenger transport, admission to art and cultural events |
| 5% | Books and non-periodical publications |
| 0% | Zero-rated supplies |
⚠ Verify the full category lists. The summary above reflects the main categories reported for the 2026 change, taken from secondary sources. Confirm the complete scope of the 12% and 5% categories against VMI before applying a reduced rate to an invoice. Getting a rate wrong on issued invoices is expensive to unwind.
When You Must Register
You must register as a VAT payer once your total consideration from taxable economic activity in Lithuania exceeds €45,000.
The basis changed too — and this catches people out
From 1 May 2025, the €45,000 threshold is calculated over the calendar year — not over a rolling last-12-months period, as it was previously. If you're working from older guidance, or from an accountant's habit, this is a real change. It means your counter resets each January rather than continuously trailing the past twelve months.
There are also separate rules for acquisitions of goods from other EU member states, which can trigger a registration obligation independently of your sales. If you're buying significant stock from within the EU, check your position separately.
Track your turnover as you go. The obligation bites when you cross the line, not at year end. If you're anywhere near €45,000, know your running total — registering late creates problems that registering on time doesn't.
Adding and Removing VAT
Two operations, and the second one is where people go wrong.
Adding VAT
Multiply the net price by 1.21.
€1,000 × 1.21 = €1,210
Removing VAT
Divide the gross price by 1.21 — don't subtract 21%.
€1,210 ÷ 1.21 = €1,000
The classic error. Taking 21% off a gross price of €1,210 gives €955.90 — wrong by €44.10. The percentage was applied to the net figure, so you have to work backwards by dividing. Our VAT calculator handles both directions.
Registering Voluntarily
You can register below the threshold if you choose. Whether you should depends almost entirely on who your customers are.
Worth considering if…
- ✓ Your customers are VAT-registered businesses — they reclaim it, so your price doesn't rise for them
- ✓ You have significant input VAT to reclaim — equipment, software, services
- ✓ You're near the threshold anyway
- ✓ You want to look established to B2B clients
Probably not if…
- ⚠ Your customers are consumers — your prices effectively rise 21%
- ⚠ Your input costs are minimal
- ⚠ You'd rather avoid the filing burden
- ⚠ You're well below the threshold with no plans to grow past it
Cross-Border and the Reverse Charge
If you sell services to businesses in other EU member states, the reverse charge mechanism often applies: you don't charge VAT, and your customer accounts for it in their own country.
This matters a great deal to Lithuanian freelancers and consultants with EU clients, because it's frequently the difference between charging 21% and charging nothing.
- B2B services within the EU — reverse charge commonly applies. You need your client's valid VAT number
- B2C sales within the EU — different rules, and distance-selling thresholds may apply
- Services to clients outside the EU — generally outside the scope of Lithuanian VAT, but confirm for your service type
- Your invoice must state that the reverse charge applies
Verify your client's VAT number before invoicing. The reverse charge depends on your customer genuinely being a taxable person in another member state. The EU's VIES system lets you check a VAT number's validity — do it, and keep the record.
Reclaiming Input VAT
Once registered, you can generally reclaim VAT paid on qualifying business purchases — that's the other side of the bargain.
- You need valid invoices. No invoice, no reclaim. This is the single most common reason claims fail
- The purchase must be for taxable business activity
- Some categories are restricted — entertainment and certain vehicle costs are commonly limited
- Mixed personal and business use requires apportionment
Keep everything. The administrative burden of VAT registration is mostly documentation, and it's much easier to keep records as you go than to reconstruct them.
Invoicing and Filing
Your invoices must contain specific information — your VAT number, the customer's details, the rate applied, the VAT amount separately, and where relevant a reverse charge notation. Getting invoice format wrong causes problems for your customer as well as you.
Returns are filed periodically and electronically through VMI's system. Your filing frequency depends on your circumstances.
Prices shown to consumers include VAT. Lithuanian retail prices are displayed gross — the shelf price is what you pay. B2B quotes are frequently net, which is a recurring source of disputes. If you're quoting as a freelancer, say explicitly whether your rate includes VAT.
⚠ Still to verify. Filing frequencies and deadlines, the full mandatory invoice content list, and the current small business scheme (smulkiojo verslo schema) rules — which Lithuanian sources indicate changed alongside the 2026 rate reform.
Need to add or strip VAT from a figure?
Both directions, all four rates, instantly.
Common Mistakes
Using the old 9% rate
Abolished from 1 January 2026 and replaced by 12% and 5%. Most online guidance hasn't caught up.
Subtracting 21% to remove VAT
Divide by 1.21. Subtracting gives the wrong answer every time.
Assuming the threshold is a rolling twelve months
It's calculated over the calendar year now. The counter resets in January.
Not tracking turnover until year end
The obligation arises when you cross €45,000, not when you notice.
Applying the reverse charge without checking the client's VAT number
Verify it, and keep the evidence.
Quoting B2B without specifying net or gross
A frequent cause of invoice disputes among freelancers. Be explicit.
Reclaiming without valid invoices
The documentation is the claim. Without it there's nothing to reclaim.
Frequently Asked Questions
What is the VAT rate in Lithuania?
The standard rate is 21%. From 1 January 2026 there are two reduced rates: 12% (accommodation, passenger transport, art and cultural events) and 5% (books and non-periodical publications). Some supplies are zero-rated.
What happened to the 9% rate?
It was abolished on 1 January 2026 and replaced by the 12% and 5% rates. Guidance written before 2026 — which is most of what's online — still refers to 9%.
When do I have to register for VAT?
When your consideration from taxable economic activity in Lithuania exceeds €45,000 in a calendar year. Separate rules apply to acquisitions of goods from other EU member states.
Is the threshold rolling or calendar year?
Calendar year, since 1 May 2025. It was previously a rolling twelve-month calculation, so older guidance is wrong on this.
Should I register voluntarily?
Often yes if your customers are VAT-registered businesses and you have input VAT to reclaim. Usually no if you sell to consumers, since your effective prices rise.
Do I charge VAT to EU business clients?
Frequently not — the reverse charge shifts the obligation to your customer. You need their valid VAT number and the correct notation on your invoice.
What does PVM mean?
Pridėtinės vertės mokestis — value added tax. You'll see PVM on Lithuanian invoices where an English one says VAT.
Are shop prices in Lithuania inclusive of VAT?
Yes. Consumer prices are displayed gross, so the shelf price is what you pay. Business quotes are often net — always clarify.
Related Guides
Disclaimer. General guidance, not tax advice. VAT rules around registration, reduced rate categories, exemptions and cross-border supplies are more complex than any guide can capture, and 2026 brought significant changes. Confirm your position with VMI or a qualified accountant before relying on this for invoicing or filing.