Lithuania to Revise Tax Exempt Income Formula
The Lithuanian parliament (Seimas) is considering draft law XIVP-1818(2), which would revise the formula for determining the tax-exempt amount (TE) for employment income of resident individuals.
The revisions are meant to counter the effects of inflation and rising energy prices for lower-income individuals. Where an individual's employment income does not exceed the minimum monthly wage (salary) on a monthly or annualized basis, the monthly or annual TE is the minimum wage, which is unchanged.
Where an individual's income does exceed the minimum monthly wage on a monthly basis, a new prescribed formula is used to determine the TE as follows: minimum monthly wage (salary) - 0.28 × (monthly employment income - the minimum monthly wage). A similar formula is prescribed for the annual TE.