Secure 2025 Tax Rates and Avoid Major 2026 Fiscal Burdens
Are you running a dormant, underperforming, or non-compliant company in Lithuania (UAB, MB, etc.)? If you’ve considered closing your business, the window to act is closing fast.
The Lithuanian Parliament has approved significant corporate tax and defense financing reforms effective January 1, 2026. For companies that liquidate before the end of 2025, the savings and compliance benefits are substantial.
1Office Lithuania outlines seven critical reasons why late 2025 is the optimal time for corporate liquidation.
7 Critical Reasons to Liquidate Your Company in Late 2025
The clock is ticking. To secure these benefits, your formal liquidation process must be initiated by Early-to-Mid Q4 2025.
1. Direct Corporate Tax Savings
Don’t pay more than you have to. Liquidating now locks in the lower 2025 rates for any final taxable income or asset distributions.
Standard CIT Rate: Avoid the increase from 16% to 17%.
Small Business Rate: Avoid the increase from 6% to 7%.
2. Escape the New Defense Fund Tax Burden
A major fiscal shift is coming. From 2026, the portion of Corporate Income Tax (CIT) revenue allocated to the state’s Defense Fund will jump dramatically from 1.9% to 8%. This represents a significant new financial pressure on companies continuing operations into the New Year.
3. Eliminate Financial and Director Liability Risk
Lithuanian law (Article 59 of the Law on Companies) strictly mandates that company equity must not fall below 50% of the registered share capital.
The Register of Legal Entities is intensifying monitoring.
Non-compliance can trigger forced liquidation and place personal liability on company directors. Voluntary liquidation removes this risk entirely.
4. Leverage Favorable Economic Timing
The Lithuanian economy is projected for solid GDP growth in 2025 Liquidating during a growth period offers advantages:
Better Asset Valuation: A stronger market can yield higher prices for asset disposals.
Smoother Debt Negotiation: Favorable economic conditions can improve creditor settlements.
5. Simplify Compliance with Strict Deadlines
The September 2024 legislative changes introduced strict time limits for companies in liquidation status. If your company acquired liquidation status after September 1, 2023, you face a hard deadline of September 1, 2025, to be removed from the Register of Legal Entities. A proactive, voluntary liquidation in 2025 ensures compliance before forced removal and potential penalties.
6. Benefit from Simplified De-Registration
Recent amendments (effective September 1, 2024) have streamlined the cancellation of involuntarily initiated liquidation proceedings, but the overarching aim is clarity. Voluntary liquidation is always simpler, faster, and 30-50% cheaper than a compulsory, court-ordered process.
7. Maximize Year-End Accounting Efficiency
Aligning the company closure with the calendar year-end (December 31st) simplifies final financial reporting, asset distribution, and tax finalization—reducing accounting complexity in the long run.
Monetary Benefits at a Glance
| Benefit Category | Estimated Financial Impact (Avoided Costs/Gains) |
| Direct Tax Savings | 1 to 2 percentage points savings on final CIT rates. |
| Defense Tax Avoidance | Avoidance of the new 8% CIT allocation burden from 2026. |
| Penalty Avoidance | Prevent Director Personal Liability and fines (€500 – €3,000+) for non-compliance. |
| Operational Savings | Eliminate annual expenses (Accounting: €1,500-€4,000/year; Admin: €800-€2,000/year). |
| Capital Release | Release the tied-up Minimum Share Capital (UAB minimum: €2,500) for distribution to shareholders. |
The window to secure your 2025 tax advantages and ensure a smooth, voluntary exit is closing rapidly. The entire liquidation process takes an estimated 4 to 6 months.
Don’t risk the 2026 tax hike or director liability. Act now!
Contact 1Office Lithuania Today to book your strategic liquidation consultation. We will manage the entire process, from liquidator appointment to final deregistration, ensuring full compliance and maximum financial benefit before the January 1, 2026, deadline.
