Should it matter who the property is leased to when taxing rental income
Should it matter who the property is leased to when taxing rental income
If immovable property is leased to companies or self-employed natural persons for the purposes of carrying out their economic activities, then the company or the natural person must calculate, withhold and pay 15% income tax on the rental income.
If immovable property is leased to natural persons (including self-employed persons without the intention to use leased premises for carrying out their economic activities), then you yourself must pay 15% income tax on the rental income received.
* Income received in Lithuania which is subject to tax: interest, royalties, rental income from immovable property located in Lithuania, income from sporting and performing arts activities, income from the sale/other transfer of ownership of immovable property located in Lithuania and movable property subject to legal registration in Lithuania. If the amount of such income does not exceed 120 average national wages per year (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), then it is taxed at an income tax rate of 15%; and if it exceeds 120 ANWs, then the part in excess is taxed at an income tax rate of 20%.