Because freelancers are not employees and Solar Staff does not pay taxes on their payouts, they must declare any income received via Solar Staff by themselves.
To carry on tax accounting in Lithuania for your Solar Staff income, you need to:
Be a tax resident
Determine the applicable tax obligations
Tax residence
Lithuania taxes its residents on their worldwide income, while non-residents are taxed on their income from Lithuanian sources only.
IMPORTANT! Income received via Solar Staff is subject to taxation in Lithuania if the related services were actually rendered in Lithuania (Article 5(4) of the Income Tax Law of Lithuania).
Individuals are considered tax residents of Lithuania if they meet at least one of the following criteria:
The individual's permanent place of residence during the tax period (calendar year) is in Lithuania.
The individual's personal, social, or economic interests during the tax period may be considered to be in Lithuania rather than in a foreign country.
The individual stays in the country, continuously or intermittently, for 183 or more days during the tax period.
The individual stays in Lithuania for 280 or more days during a number of successive tax periods, and for 90 or more days, continuously or intermittently – during one of such periods.
The individual is a Lithuanian citizen and receives income under an employment or any other substantially similar contract covered from the state or municipal level budget funds of Lithuania, or their costs of living in another country are covered from budget funds of Lithuania.
Useful links: questionnaire for determining tax residency; rules for calculating the days of stay in Lithuania; exemptions for foreign persons to not qualify as a tax resident.
Lithuania has double taxation agreements with a number of countries (full list), the provisions of which may override the applicable tax residence rules and other provisions of national legislation.
Taxpayer ID number
The National Identification Number (Asmens kodas, a. k., asm. k., AK) is a unique, lifelong identifier assigned to individuals and used for filing tax returns, accessing public services, conducting financial transactions (such as opening a bank account) and more. It comprises 11 digits in the format G YYMMDD NNN C, including a digital indicator of the holder's gender and their date of birth (example: 6 920722 456 3). The Centre of Registers (Registrų centras) assigns the number to citizens at birth (with data entered into the Register of Residents of Lithuania – Lietuvos Respublikos gyventojų registras). The Migration Department under the Ministry of the Interior of the Republic of Lithuania (Migracijos departamentas prie Lietuvos Respublikos vidaus reikalų ministerijos) assigns it to foreign nationals after they obtain Lithuanian citizenship or a residence permit (leidimas gyventi). The number appears on identity documents (passport, personal identity card, or residence permit (leidimas gyventi)) and serves as both the taxpayer identification number (Mokesčių mokėtojo identifikacinis numeris, MMIN) and the social security number (Socialinio draudimo numeris, SDN).
The Code of the Alien with Interests in Lithuania (Interesų Lietuvoje turinčio užsieniečio kodas, ILTU kodas) is a functionally similar identification number assigned to foreign nationals who have social and/or economic interests or obligations in Lithuania, but whose migration status does not meet the criteria for receiving an AK number. The number consists of 11 characters and is issued upon application to the Migration Department of Lithuania, with data entered into the Register of Foreigners (Užsieniečių registro) after payment of a registration fee.
The Taxpayer Identification Number (Mokesčių mokėtojo identifikacinis numeris, MMIN or Mokesčių mokėtojo kodas) is used to identify individuals and legal entities within the tax system. It consists of 10 digits and is required only for those individuals whose details are absent from the state registers described above (and who consequently do not have AK/ILTU codes), if such individuals become liable for tax on income received. In such cases, the number is automatically assigned by the State Tax Inspectorate under the Ministry of Finance of the Republic of Lithuania (Valstybinė mokesčių inspekcija prie Lietuvos Respublikos finansų ministerijos, VMI / STI) upon application, with details entered into the Register of Lithuanian Taxpayers (Mokesčių mokėtojų registre). Learn more about MMIN
The VAT Payer identification number (PVM mokėtojo kodas / PVM identifikacijos numeris) is a number assigned by the State Tax Inspectorate of Lithuania upon registration for payment of value added tax (VAT/PVM). It consists of the prefix LT (country code), the taxpayer number (AK or MMIN) without a hyphen, the VAT index "1", and a check digit (example: LT399090112341). Registration as a VAT payer is mandatory when specific thresholds are met or may be voluntary. You can verify the validity of a VAT number here.
Taxes and contributions payable by freelancers
Tax liabilities in Lithuania depend on the chosen tax status and/or eligibility for certain criteria. In Lithuania, two tax statuses are available for earning income through Solar Staff:
IMPORTANT! Solar Staff does not have the option to choose a tax status for freelancers based in Lithuania, but you can fill in your taxpayer ID in your account.
Taxpayers can register on the following portals:
Mano VMI – for interacting with tax authorities and obtaining up-to-date personal information regarding tax liabilities;
Elektroninio deklaravimo sistema (EDS) – for online filing of tax returns;
i.APS – for keeping records online (relevant for individuals engaged in individual activities), learn more about the portal's subsystems.
The following tools are used for access:
External systems (identifiers from banks / the Centre of Registers of Lithuania (VĮ Registrų centras) / state services portal "E-Government Gateway" (Elektroniniai valdžios vartai))
Electronic signature (elektroninis parašas)
Identifiers (username and password) provided to the individual by the State Tax Inspectorate of Lithuania (STI), learn more about obtaining STI identifiers.
Useful links: FAQs on EDS; details on e-signature; how foreign nationals may obtain access credentials, as well as the relevant application form.
Read on for more details.
Individual
An individual (fizinis asmuo) is a tax status applied to all natural persons by default, requiring no formal registration. Under this status, you can only declare income received through Solar Staff in the form of one-time payments, that is, from irregular independent activities. Otherwise, an obligation arises to register as a sole proprietor.
Income tax (Gyventojų pajamų mokestis, GPM) on income received through Solar Staff (Class B income, where tax liability rests with the individual themselves) is calculated at a rate of 15% if the total annual income year does not exceed EUR 253,065.60. This threshold is set at 120 times the average wage (vidutinis darbo užmokestis, VDU) (VDU for 2025). Where income exceeds this threshold, the portion above it is taxed at 20%.
When calculating income tax, deductions can be claimed (e.g., for insurance contributions and educational expenses). Supporting documents need not be submitted with the tax return (they are only required upon request) but must be retained for at least 10 years.
Income tax returns (pajamų mokesčio deklaracija) are filed using Form GPM311. For income received though Solar Staff, you must also complete Annex GPM311F1, specifying income code 77 (income from other services) (see the tax return guidance). Returns may be filed online via the EDS portal, in person at the State Tax Inspectorate (by prior appointment) or by post to the tax inspectorate's address. The standard filing deadline is no later than 1 May of the year following the reporting year. Individuals recognised as Lithuanian tax residents under the 280/90-day criterion must file their returns before 31 December of the year following the year of their arrival.
Tax payment is due by the tax return filing deadline (before 1 May) and payable online to an STI account (payment code: 1441). Those facing financial hardship may apply to the tax authority for permission to pay later or in instalments (learn more).
Sole proprietor
A sole proprietor (individualios veiklos vykdytojas) or a person engaged in individual activity (individuali veikla) is an individual who carries out entrepreneurial activities on a permanent basis without establishing a legal entity and is subject to certain obligations.
Eligibility: Only persons aged 18 or above may become sole proprietors (registration is possible from age 14 with free-form consent of a parent/guardian); non-EU / European Free Trade Association (EFTA) nationals must hold a valid temporary or permanent residence permit in Lithuania.
Tax regimes available to sole proprietors earning income through Solar Staff:
Useful links: comparative table of both regimes; business start-up guide ; podcast on launching individual activity.
Further details on tax regimes:
Individual activity certificate
An individual activity certificate (individuali veikla pagal pažymą) is the default regime applying without income-level restrictions or activity limitations (except for activities requiring a legal entity).
Registration to apply this regime can be completed in one of the following ways (it is necessary to indicate the type of activity (EVRK code) and its place):
Online via the Mano VMI portal (video guide)
By notifying tax authorities by phone +370 5 260 5060
In person by submitting Form REG812 (the submission requires prior appointment as well as identity documents and proof of residency eligibility), or
by opening a special sole proprietor bank account (Smulkaus verslininko sąskaita, SVS) (in this case, the registration data is automatically reported to tax authorities; the individual only needs to provide their EVRK code within five business days of account opening; learn more about the account).
The application may only be submitted on or after the individual activity commencement date, and its submission confirms that the tax authority has been notified of such commencement. Upon request, the tax authority may issue a certificate of individual activity commencement (Form FR0468) within ten days (five days – for online submissions). Learn more about the registration process
When ceasing activity as a sole proprietor, the individual must notify the State Tax Inspectorate of Lithuania no later than the last day of conducting such activity. Notification methods are the same as those used for sole proprietorship registration (learn more).
Record-keeping. Sole proprietors must maintain regular books of income and expenses; online accounting via the i.APS portal is permitted. Sole proprietors are also required to issue VAT invoices for income received through Solar Staff (see document templates here). VAT invoices must be retained for at least ten years, while books of income and expenses, receipts, delivery notes, and other financial records must be kept for at least five years.
One of the following accounting methods can be used:
Cash accounting (pinigų apskaitos principą) with income and expenses recorded only upon actual receipt or payment (and tax returns declaring sums actually received in the reporting year); this method applies by default
Accrual accounting (kaupimo apskaitos principą) with income and expenses recorded when they are incurred (e.g., when issuing an invoice) regardless of the actual payment receipt date; this method can be used voluntarily, but becomes mandatory if the sole proprietor:
Is registered as a VAT payer, or
Uses long-term assets (e.g., equipment, vehicles) in their activities.
Taxpayers applying this regime must pay the following taxes and contributions:
Income tax (Gyventojų pajamų mokestis, GPM) is calculated as follows: GPM = (Income – Expenses) × 15% – Tax Credit. The tax credit (pajamų mokesčio kredito, PMK) is computed using a special formula (learn more):
Annual sole proprietor income | Tax credit (TC) calculation formula |
Less than EUR 20,000 | TC = Annual Income × 0.1 |
More than EUR 20,000 | TC = Annual Income × (0.1 – 2/300,000 × (Annual Income – 20,000)) |
Thus, through the tax credit mechanism, the effective income tax rate ranges from 5% to 15% (calculation examples).
Deductible expenses comprise either documented activity-related costs (actual incurred amounts), or a fixed deduction of 30% of income (no documentary proof required). Losses may be carried forward indefinitely (per Article 18(1) of Lithuania’s Income Tax Law).
Income tax returns (pajamų mokesčio deklaracija) are filed using Form GPM311, with income from individual activity also to be declared in Appendix GPM311C. Filing is required even in the absence of income during the tax period. Failure to file or late filing of the tax return, or submission of incorrect information, may result in a warning or fine of EUR 60–140 (Article 187(1) of Lithuania's Code of Administrative Offences).
Methods and deadlines for tax return filing and tax payment are the same as those set for individuals.Mandatory health Insurance contributions (Privalomojo sveikatos draudimo (PSD) įmoka) are remitted to the State Social Insurance Fund (Valstybinio socialinio draudimo fondo valdyba, Sodra). The contribution base equals 90% of total taxable income. Contributions are calculated using the monthly minimum wage (minimalus mėnesinis atlyginimas, MMA) effective in the payment month (EUR 1,038 for 2025), per the formula: 6.98% × EUR 1,038 = EUR 72.45.
Payment is due no later than the last day of each month.
At year-end, contributions are recalculated based on the annual income tax return. Any outstanding amount (calculated based on 90% of annual taxable income) is payable before 2 May of the following year. The maximum annual contribution is EUR 6,329.59.State social insurance contributions (Valstybinio socialinio draudimo (VSD) įmoka) are payable to the State Social Insurance Fund (Sodra). The contribution base equals 90% of total taxable income (capped at 43 times the average wage (VDU) or EUR 90,681.84), subject to the following rates (2025 rates):
12.52% if the individual makes no additional pension savings (maximum contribution: EUR 11,353.37)
15.52% if the individual makes additional pension savings, comprising the base rate plus a 3% supplementary contribution (maximum: EUR 14,073.82)
Contributions may be paid monthly in advance payments or annually. Monthly advance payments on income earned in the current calendar month are due no later than the last day of that month. Annual contributions are due no later than 2 May of the year following the reporting year (contribution calculator). Payments are made online (payment code: 444). Learn more on instalment payments here.
A separate notification report titled "Pranešimas apie savarankiškai dirbantį asmenį" (Form SAV) must be submitted only when paying contributions monthly, with a filing deadline of no later than the 15th day of the month following the reporting month. When paying contributions annually, their details are to be included in the income tax return (Form GPM311).
IMPORTANT! In the first year of individual activity, sole proprietors are exempt from paying VSD contributions by default. However, during this year they also forfeit entitlement to social benefits.
Those wishing to opt out of this exemption must notify Sodra by submitting a free-form application online, by e-mail to [email protected] (a qualified electronic signature required), in person at any Sodra branch (prior appointment and proof of identity required) or by post (a notarised copy of the identity document must be attached).
Value added tax (Pridėtinės vertės mokestis, PVM) is payable if the total value of VAT-taxable transactions in the current or previous calendar year exceeds (or will exceed) the EUR 45,000 threshold (other criteria detailed here). Voluntary registration or application of a special VAT tax regime for small businesses (Smulkiojo verslo schemos, SVS) is also possible.
VAT payment requires registration as a VAT payer by completing Form FR0389 online (registration video guide). Processing takes three business days (tax authorities may request additional information using Form FR0619). Upon registration approval, the State Tax Inspectorate issues Certificate FR0618, assigning a VAT identification number.
The standard VAT rate is 21% (reduced rates of 9% (rising to 12% from 2026), 5%, and 0% apply to specific goods/services). VAT compliance mandates record-keeping and invoicing requirements (VAT invoices must be issued), learn more.
VAT returns (PVM deklaracija) are filed using Form FR0600 (filing guidance) exclusively online through the EDS portal. The default reporting period for persons engaged in individual activity is six month (transition to monthly reporting is possible upon request). The filing deadline is before the 25th day of the month following the last month of the reporting period.
Additionally, in certain cases, an obligation may arise to submit an annual VAT return (Metinė PVM deklaracija), Form FR0516 (learn more here)
Tax payment must be made no later than the tax return filing deadline.
Furthermore, when selling goods/providing services to foreign clients registered in the European Union, the freelancer must submit a Recapitulative Statement (Prekių tiekimo ir paslaugų teikimo į kitas Europos Sąjungos valstybes nares ataskaita), Form FR0564, specifying the VAT numbers of buyers (verify VAT number). This report is filed electronically via the EDS portal (completion rules). The filing deadline is no later than the 25th day of the month following the month in which such transactions were made. Learn more about the Recapitulative Statement here.
Business certificate
A business certificate (individuali veikla pagal verslo liudijimą) is a special tax regime permitting sole proprietor activity under a business certificate (a patent equivalent).
A business certificate (verslo liudijimas) is a registered state certificate (Form FR046) issued by the State Tax Inspectorate and confirming the right to conduct specified activities for a defined period.
Eligibility for this regime is limited to specific types of activities (full list of permitted activities) with annual income not exceeding EUR 45,000 for the tax period (calendar year). Furthermore, sole proprietors are not permitted to hire employees under employment contracts for activities covered by the certificate.
IMPORTANT! A business certificate does not entitle the holder to:
to provide services / sell goods to companies whose activities are similar to those of the certificate holder; and/or
receive income from individual activity, if the combined annual income from legal entities or individuals engaged in individual commercial activity exceeds EUR 4,500 over a calendar year. Exceeding this limit obliges tax authorities to transfer the taxpayer to the individual activity certificate-based regime (per Article 3(22.2.1) of the Order on Registration Rules for Natural Persons in the Taxpayer Register).
Registration may be completed online via the Mano VMI portal (step-by-step guide) or in person by submitting an application (Form GPM307) to the VMI at the place of residence (prior appointment required), accompanied by:
Applicant’s passport or other valid ID
Photograph (3×4 cm)
Proof of kinship/marriage/guardianship (if third parties are named in the certificate as activity participants)
Document verifying eligibility for municipal council tax relief (if any)
Temporary/permanent residence permit (for non-Lithuanian applicants)
IMPORTANT!
A business certificate will not be issued if the applicant has arrears owed to Sodra from the previous reporting period.
Separate applications must be submitted for each distinct activity type when conducting multiple business activities.
A business certificate is issued for the period specified in the application, with a maximum validity of one calendar year and a minimum validity of five business days (exceptions apply to trading activities). The validity period may be extended within the current calendar year at the applicant’s request. To continue activity in the following year, a new application must be submitted (learn more).
Payment for the business certificate is made as a fixed-sum tax (fiksuoto dydžio pajamų mokestis) to a relevant account (payment code: 1461). The amount is set by the municipal council (savivaldybės taryba) for the locality where the sole proprietor will operate, and is calculated proportionally to the validity period specified in the application (calculator). The cost of the certificate must be paid before the application is submitted.
The certificate is issued within four business days from the date of submitting the above documents.
Upon ceasing activities, the individual must notify the State Tax Inspectorate of Lithuania. Notification methods are the same as those for applying for the business certificate. To claim a tax refund for the unused period, Form FR0781 must be submitted (learn more).
Record-keeping. Sole proprietors must maintain regular books of income and expenses (a separate book for each activity type), with online accounting via the i.APS portal permitted. Sole proprietors are also required to issue VAT invoices for income received through Solar Staff (see document templates here). VAT invoices must be retained for at least ten years, while books of income and expenses, receipts, delivery notes, and other financial records must be kept for at least five years. Accounting under this regime uses exclusively the cash method (pinigų apskaitos principą), meaning recording occurs upon actual receipt of funds. Learn more about record-keeping and reporting documents.
Taxpayers applying this regime must pay the following taxes and contributions:
The income tax (Gyventojų pajamų mokestis, GPM) is paid as a fixed-sum tax (fiksuoto dydžio pajamų mokestis). The applicable rate is determined separately for each type of activity specified in the business certificate and may vary across municipalities. Municipal councils submit approved fixed-sum income tax amounts for the following year to the State Tax Inspectorate before 10 November of the current year (rates for 2025).
If eligibility limits for this regime are not complied with (notably the EUR 45,000 income threshold), taxation of the excess income mirrors that for sole proprietors operating under an individual activity certificate. In this case, the taxpayer may either submit Form REG812 to transition to the individual activity certificate-based regime or will be automatically transferred by the tax authority following the tax return filing.
Tax returns are submitted following the same procedure established for sole proprietors operating under the individual activity certificate.Mandatory health insurance contributions (Privalomojo sveikatos draudimo (PSD) įmoka) are remitted to Sodra. By default, regardless of the business certificate's validity period, the contribution is calculated as 6.98% of the monthly minimum wage (MMA) effective in the payment month (EUR 1,038 for 2025), amounting to EUR 72.45. The maximum annual contribution is EUR 869.40.
If contributions are already paid for the individual by their employer (in case of employment) or the state (pensioners, persons with a disability), contributions may be calculated proportionally to the business certificate’s validity period.
Payment of contributions is made monthly in advance by default, due no later than the last day of each month. Annual payment (before 2 May of the year following the reporting year) is permitted only under specific circumstances.No reporting is required.
State social insurance contributions (Valstybinio socialinio draudimo (VSD) įmoka) are payable to Sodra. The contribution amount depends on the business certificate’s validity period, specifically:
If the validity period covers a full calendar month (first to last day), the standard monthly contribution is calculated as:
8.72% of the MMA, if the individual makes no additional pension savings (EUR 1,038 × 8.72% = EUR 90.51)
11.72% of the MMA, if the individual makes additional pension savings (includes 3% supplementary contribution; EUR 1,038 × 11.72% = EUR 121.65)
If the validity period is shorter or longer than one month (e.g., several days), contributions are calculated proportionally to the number of days based on the standard monthly contribution amounts above (contribution calculator).
Contributions must be paid in advance upon issuance of the business certificate, if the certificate is issued for less than three months. For certificates exceeding this period, payments may be made quarterly – before the 15th day of the first month following the reporting quarter. Payments are made online (payment code: 444).
No reporting is required.
IMPORTANT! The first-year exemption from VSD contributions applies equally to business certificate holders, following the same procedure as for sole proprietors operating under the individual activity certificate.
Value added tax (Pridėtinės vertės mokestis, PVM) is payable identically to the individual activity certificate-based regime.
Additional information
Income received via Solar Staff is declared using certificates and invoices, and in accordance with the offer agreement.
If you have any questions, get in touch via the chat in your Solar Staff account or email us at [email protected].