Capital Gain Tax in Lithuania

Capital gain is difference between sales price of capital asset and value of acquisition, as well as difference between liquidation quota and value of investment.

In Lithuania there are no special rules on capital gains tax and basically capital gains or losses are added to company’s ordinary taxable income. Corporate income is taxed by 15 % rate. Individuals are taxed by 15 % on capital gains from the disposal of property as well as shares.

Gains from the disposal of shares held continuously for 366 days and more are not subject to this tax if they satisfy certain criteria, the most important whereof is that shares should be held for 3 years. This rule is not applicable if the seller’s activity is to deal shares consistently.

Capital gains from the sale of real estate located in EEA are exempt if the assets are owned for no less than 3 years before the sale, unless the sale of real estate constitutes the business activities of the individual.

Gains from the sale of an individual’s residence (including land plot) located in EEA are exempt if the individual lived in the premises for at least 2 years, or lived for shorter period than 2 years when the income from the sale is used within 1 year to purchase another residence where domicile will be declared. Otherwise, the difference between the income received from the sale of assets and value of acquisition is taxed by 15 %.

Capital gains of a non-resident company usually are taxed in its home country with an exception of real estate transfer and transfer of property ascribed to the permanent establishment in Lithuania.