Deducting expenses from income sourced from self-employment under an individual activity certificate

Allowable deductions are ordinary expenses incurred in the course of self-employment under an individual activity certificate, linked to the income thereof actually generated during the year. 

There are two ways to deduct expenses from income sourced from self-employment under an individual activity certificate: 

• deduct expenses actually incurred and documented; or 
• deduct 30% of the generated income (without documentation). 

For more detailed information, please see here (only in Lithuanian). 

Please note that not all expenses substantiated by documentation may be deducted from self-employment income. For the purposes of calculating personal income tax, three types of expenses are identified:

• expenses that are fully deductible  (allowable deductions);
• expenses that are partly deductible (limited allowable deductions); 
• expenses that cannot be deducted (non-allowable deductions).