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New changes for applicable tax-exempt amount of income

Please be informed that below you can find the information on the Law Amending Article 20 of the Law on Personal Income Tax (Law No. XIV-10981 of 17 May 2022) which amended the applicable Tax-exempt amount of income for 2022 and later (hereinafter - TEAI) and which came into force on 1 June this year. When the salary does not exceed the minimum monthly wage (hereinafter- MMW), the TEAI increases from EUR 460 to EUR 540. Please note that this amendment to the law applies a new TEAI formula and increases the threshold to EUR 1,704, from which the TEAI applies.

 

Although these provisions of the Law entered into force on 1 June 2022 (if the wage is paid after 1 June 2022, the new provisions of the Law shall apply), it is established that the increased monthly TEAI and annual TEAI apply from 1 January 2022 when declaring income for 2022 and subsequent tax periods during and calculating personal income tax.

 

Changes for applicable TEAI:

 

Salary:

Monthly TEAI

From 2022-01-01 to 2022-06-01

From 2022-06-01

Less or equal to 1 MMW

EUR 460

EUR 540

More than one MMW, but less than EUR 1,704 (before the amendment to the Law - EUR 1,678)

460 - 0.26 x (MW1 - 1 x MMW)

540 - 0.34 × (MW - 1 x MMW)

More than EUR 1,704 (before the amendment to the Law – EUR 1,678)

400 - 0.18 × (MW - 642)

400 - 0.18 × (MW - 642)

Working capacity level:

Monthly TEAI

0–25%

EUR 740

EUR 870

30–55%

EUR 690

EUR 810

 

1 Monthly wage or employment income.

 

Of the population with a working capacity level of more than 55%, the largest increase in after-tax income due to increased TEAI will be for those whose employment-related income per month does not exceed the minimum monthly wage per month (1 January 2022 - € 730) or € 8,760 per year. Income after tax will also increase for people of the same working capacity whose salary does not exceed € 1,704 per month or € 20,448 per year, and for those earning more than € 1,704 per month or € 20,448 per year, after-tax income will not increase.

 

The TEAI will also increase for people with a working capacity below 55%:

 

  1. The monthly TEAI has been increased to EUR 870 for persons with a level of the working capacity of 0–25%, or for persons who have reached the retirement age, for whom the level of significant special needs has been established in accordance with the procedure established by law, or for persons with a severe level of disability.
  2. The monthly TEAI for persons with a working capacity level of 30–55%, or for persons who have reached the retirement age, for whom the level of medium or low special needs has been established in accordance with the procedure established by law, or for persons with a moderate or mild level of disability, increased to 810 euros.

Please contact our tax advisors at lithuania.tax@leinonen.eu for more information.


13.06.22


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