We have some great news for all non-Lithuania residents. Starting from April, 2022 we will provide an opportunity for non-Lithuania residents to reduce the withholding tax.
How is foreigners / non-Lithuania residents' income taxed?
If you are a foreign investor or non-Lithuania resident your interest income (from rent and capital growth) earned on InRento is currently taxed at 15% tax rate. Meaning that if you earn 1000 EUR in income from interest, you will be taxed for 150 EUR and you will receive 850 EUR. However, please note that it’s possible to reduce this tax- read below.
Income earned from late payments and penalties are not taxed, meaning that the income that you earn does not have any tax withholding.
Filing for taxes and paying them in your local tax residency is your own responsibility.
How is it possible to reduce the withholding tax?
In order to reduce the withholding tax the investor is required to download, fill in and sign the DAS-1 request form then send the form and proof of tax residency document at email@example.com with email title: “Withholding taxes”. The withholding tax will be reduced to those people who are residents of the countries that Lithuania has a double tax treaty exemption agreement with:
The withholding tax will be reduced to 0% if you are a resident of:
United Arab Emirates, Cyprus and Latvia.
The withholding tax will be reduced to 10% if you are a resident of:
Armenia, Austria, Azerbaijan, Belarus, Belgium, Bulgaria, Czech Republic, Denmark, Estonia, Greece, Georgia, India, Iceland, Spain, Italy, Israel, Japan, United Kingdom of Great Britain and Northern Ireland, Canada, Kazakhstan, China, Kyrgyzstan, Korea, Kosovo, Croatia, Kuwait, Poland, Liechtenstein, Luxembourg, Macedonia, Malta, Mexico, Moldova, Norway, The Netherlands, Portugal, France, Romania, Russia, Serbia, Singapore, Slovakia, Slovenia, Finland, Sweden, Switzerland, Turkey, Turkmenistan, Ukraine, Uzbekistan, Hungary, Germany.
How is Lithuanian residents' income taxed?
If you are a Lithuania resident, withholding tax will not be applied to you for your interest income (from rent and capital growth) earned on InRento. This means that if you earn 1000 EUR worth of interest, you will receive all 1000 EUR, then paying taxes on this income will be your responsibility while declaring taxes.
Income earned from late payments and penalties will be taxed at 15% tax rate. Please note, that this tax is automatically withheld and you don't have to pay it on top.
Tax relief for Lithuanian residents’
Disclaimer: the following information is not and can not be considered as tax advice. The validity of this statement is based on the official information given at the time of publication of this article. Before making any decision about taxes please consult your accountant or your local tax authorities.
At the time of publication of this article “Valstybinė mokesčių Inspekcija” has issued a tax relief for income earned on platforms such as InRento for your interest income (from rent and capital growth). Currently, investors are only taxed on annual income which exceeds 500 EUR on interest income, meaning that if you earn less than 500 EUR of interest income you will be provided with a tax relief. Please read more about the tax relief on the official Tax authorities website.