Add VAT to a net price, or strip VAT out of a gross price. Lithuania's standard VAT rate — pridėtinės vertės mokestis, PVM — is 21%.
Calculate VAT
⚠ Verify before publishing. The 21% standard rate is well established, as is the 12%/5% split that replaced the old 9% rate on 1 January 2026. The exact scope of what qualifies — 12% covers accommodation services, passenger transport and admission to cultural events; 5% covers books and non-periodical publications — is from secondary sources and should be confirmed against VMI before this page goes live. Reduced rate scopes have edge cases and readers will use this for invoicing.
How VAT Works in Lithuania
VAT is a consumption tax added at each stage of the supply chain and ultimately paid by the end consumer. Businesses collect it on sales and reclaim it on purchases, passing the difference to the tax authority.
The arithmetic
Two operations, and people get the second one wrong constantly.
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 common mistake. To remove VAT from a gross price, you divide by 1.21 — you don't subtract 21%. Taking 21% off €1,210 gives €955.90, which is wrong by €44.10. The percentage is applied to the net figure, not the gross one, so you have to work backwards.
When You Need to Register for VAT
Not every business charges VAT. Registration becomes compulsory once your taxable turnover from economic activity in Lithuania exceeds €45,000 within a calendar year — from 1 May 2025 this is calculated over the calendar year, not the rolling last-12-months period used previously. Separate rules apply to acquisitions from other EU member states. You can also register voluntarily below the threshold, which is often worth doing if your customers are VAT-registered businesses and you have significant input VAT to reclaim.
⚠ Still to verify. The EU acquisitions threshold, and the small business scheme (smulkiojo verslo schema) that changed alongside this — confirm both against VMI. The €45,000 registration threshold and its calendar-year basis are confirmed.
Practical Notes
- Displayed prices include VAT. Consumer prices in Lithuanian shops are shown gross, so what's on the label is what you pay.
- Business-to-business quotes are often net. If you're freelancing, be explicit about whether your rate includes VAT — this is a frequent source of invoice disputes.
- Reverse charge applies to many cross-border B2B services within the EU, meaning you don't charge VAT and the customer accounts for it. Check whether it applies to you before invoicing an EU client.
- Keep your invoices. Input VAT can only be reclaimed with valid documentation.
- Filing is periodic and digital. VAT-registered businesses submit returns through VMI's electronic system.
Other Lithuanian Taxes
VAT is one of several. If you're working here, income tax and social contributions matter more to your monthly position:
| Tax | Rate | Applies to |
|---|---|---|
| VAT (PVM) | 21% standard | Goods and services |
| Income tax (GPM) | 20% / 25% / 32% | Progressive: thresholds €83,237 and €138,729 |
| Sodra — employee | 19.5% | Gross salary, incl. 6.98% health |
| Corporate tax | 17% | Company profits; lower rates for small and new companies |
| Dividends | 15% | Flat, regardless of other income |
⚠ Still to verify. Corporate tax rates and the conditions for the reduced small-company and new-company rates. GPM brackets are confirmed for 2026.
Working in Lithuania?
Employers quote gross. See what actually reaches your account.
Frequently Asked Questions
What is the VAT rate in Lithuania?
The standard rate is 21%. Since 1 January 2026, reduced rates of 12% (accommodation, passenger transport, cultural admission) and 5% (books and non-periodical publications) apply to certain categories, and some supplies are zero-rated. Confirm the specific category with VMI before applying a reduced rate.
How do I remove VAT from a price?
Divide the gross price by 1.21 for the standard rate. Don't subtract 21% — that gives the wrong answer, because the percentage is calculated on the net figure rather than the gross one.
What does PVM mean?
Pridėtinės vertės mokestis — value added tax. You'll see PVM on Lithuanian invoices and receipts where an English invoice would say VAT.
Do I have to register for VAT as a freelancer?
Only once your taxable turnover exceeds €45,000 within a calendar year, though voluntary registration is possible and sometimes advantageous. This changed from a rolling 12-month basis to a calendar-year basis on 1 May 2025.
Can I reclaim VAT on business purchases?
If you're VAT-registered, you can generally reclaim input VAT on qualifying business purchases, provided you hold valid invoices. Some categories are restricted.
Do I charge VAT to clients in other EU countries?
Often not, for B2B services — the reverse charge mechanism usually shifts the obligation to the customer. The rules depend on the service and the customer's status, so check before invoicing.
Are prices in Lithuanian shops shown with VAT?
Yes. Consumer prices are displayed gross, so the shelf price is what you pay at the till.
Related
Disclaimer. This calculator is for general guidance and does not constitute tax advice. VAT rules around registration, reduced rates, exemptions and cross-border supplies are more complex than any calculator can capture. Confirm your position with VMI or a qualified accountant before relying on these figures for invoicing or filing.