What expenses and under what procedure can be deducted from the income from individual activity?

In carrying out individual activity through a fixed base in Lithuania, you can deduct the following expenses from income: expenses incurred that are related to income from individual activity actually received or earned during the tax period, that are routine in such activity, for example, purchase costs of re-sold goods, materials, raw materials, parts or other items, rental costs of assets used in the activity, advertising costs, purchase costs of tools, wage costs of employees, social insurance contributions, compulsory levies and other expenses related to income from individual activity.

Expenses can be deducted from the income from individual activity in two ways:

1) expenses substantiated by documentary evidence that were actually incurred; or

2) 30% on the income received (without documents). In this case, you are not required to have substantiating documents for the deductible amount

Please note that not all expenses substantiated by documentary evidence available can be deducted from the income.

For more information on what expenses can be deducted from individual activity income refer to Article 18 of the Law on Personal Income Tax.

Expenses attributable to allowable deductions must be substantiated by documents which bear all mandatory details of accounting documents that are provided for in the Law of the Republic of Lithuania on Accounting and in other legal acts.