Should it matter who the property is let out to when taxing rental income

If immovable property is let out to companies or self-employed residents for the purposes of carrying out their economic activities, then the company or the resident must calculate, withhold and pay 15% income tax on the rental income.

If immovable property is let out to residents (including self-employed persons without the intention to use the let out premises for carrying out their economic activities), then the original owner of the property must pay 15% income tax. Such income must be declared in the annual income tax return, and the income tax payment must be made at the end of the year, by 1 May of the following year. In all cases, if the annual amount of this and other non-employment taxable income exceeds 120 average national wages (hereinafter referred to as “ANW”) (120 ANWs in 2024 amounted to EUR 228,324; 120 ANWs in 2023 amounted to EUR 202,188; 120 ANWs in 2022 amounted to EUR 180,492; 120 ANWs in 2021 amounted to EUR 162,324; 120 ANWs in 2020 amounted to EUR 148,968; 120 ANWs in 2019 amounted to EUR 136,344), then the part in excess is taxed at an income tax rate of 20%.

The annual amount of income comprised of 120 ANWs does not include income from self-employment, income from distributed profits, royalties received from the employer, profit shares and remuneration for membership in the Supervisory or Management Board, loan committee, income received under civil (service) agreements by small partnership directors in respect of management activities who, according to Republic of Lithuania Law on Small Partnerships, are not members of those small partnerships themselves.