Every Lithuanian UAB accumulates accounting obligations from the first day of registration. Not from the first invoice. Not from the first employee. From day one. Monthly VMI declarations, VAT returns, SoDra payroll filings, and an annual financial report due by 31 May every year: these are not optional obligations that apply only to large or active companies. They apply to every registered UAB regardless of trading volume, regardless of revenue, and regardless of whether the founder lives in Lithuania or on the other side of the world. This article sets out exactly what Lithuanian accounting law requires, what each obligation involves, and why a foreign-owned UAB cannot meet these requirements without a qualified Lithuanian accountant maintaining the books from month one.
Accounting obligations for a Lithuanian UAB: what the law requires and when each obligation begins
Lithuanian accounting is governed by the Law on Accounting of the Republic of Lithuania. It establishes that every economic entity operating in Lithuania must maintain accounting records that accurately reflect all transactions from the date of establishment. There is no revenue threshold below which this obligation is suspended. A UAB with zero revenue in a given month still has an obligation to file a declaration with VMI for that month. A UAB with no employees still has SoDra registration obligations where applicable. The obligations exist in parallel, and each is monitored by a separate authority.
Every transaction affecting the company's financial position must be recorded in the accounting system in the month it occurs. This includes all sales invoices issued, all purchase invoices received, all bank movements, all payroll transactions, and all payments to VMI and SoDra. Transactions cannot be reconstructed in bulk at year-end without significant additional cost and risk of inaccuracy.
Lithuanian accounting standards require the use of an accounting system that produces accurate financial statements. For foreign-owned UABs, this means the accounting must be handled either by a qualified in-house accountant with appropriate professional insurance or by a registered accounting service provider. 1Office Lithuania uses dedicated accounting software for each client, with the company owner granted access to a real-time financial dashboard showing sales, payments, payroll, and account balances.
The State Tax Inspectorate (VMI) is the primary tax authority for Lithuanian companies. Monthly declarations cover withholding tax on payments to individuals (salary, dividends, management fees), where applicable. For companies above a certain profit threshold, advance Corporate Income Tax payments are required during the year.
The annual Corporate Income Tax return is due by 15 June of the year following the tax period (for a calendar-year company, the 2025 CIT return was due 15 June 2026). The CIT rate from 2026 is 17% standard, 7% for qualifying small companies with fewer than 10 employees and revenue below EUR 300,000, and 0% for the first two tax periods for newly registered qualifying companies from 2026.
All VMI declarations require an accountant registered with the State Tax Inspectorate. 1Office Lithuania accountants hold this registration and file all declarations directly through VMI systems.
VAT registration in Lithuania is mandatory once the company's taxable turnover within a rolling 12-month period exceeds EUR 45,000. For foreign companies making taxable supplies in Lithuania without being established here, registration is required from the first taxable supply, with no threshold. Voluntary registration below EUR 45,000 is permitted and often beneficial for input VAT recovery.
Once VAT-registered, the monthly VAT return must be submitted to VMI by the 25th of the following month. The standard VAT rate in Lithuania is 21%. From 2026, the previous 9% reduced rate was abolished and reorganised: accommodation, passenger transport, and cultural event tickets now carry 12%; books and non-periodical publications carry 5%. VAT returns must correctly apply the rate applicable to each category of supply made.
A Lithuanian UAB with employees must register with the State Social Insurance Fund Board (SoDra) and process payroll in compliance with Lithuanian labour law and social insurance regulations. For each employee, the employer must calculate and deduct employee social insurance contributions (19.5% of gross salary), calculate and deduct personal income tax at 20% (or 32% on earnings exceeding the upper threshold), and pay employer social insurance contributions at 1.77% in 2026.
The monthly SoDra declaration must be filed by the 15th of the following month and all contributions paid by the same date. This is a separate obligation from VMI declarations and managed through a separate authority and system. Payroll processing for a Lithuanian UAB is not a year-end task. It is a monthly obligation from the date of the first employee's first salary.
Management fees paid to non-resident directors or shareholders are subject to withholding tax obligations even where no employees are present. The applicable withholding rate and any treaty reductions must be assessed and correctly applied at the time of each payment.
Every Lithuanian company must prepare and submit an annual financial report to the Centre of Registers (Registru centras) by 31 May each year, covering the previous calendar year. The report must be prepared in accordance with Lithuanian accounting standards (Business Accounting Standards, BAS) and include a balance sheet, profit and loss account, notes, and a management commentary.
The annual report can only be prepared from complete, accurate monthly bookkeeping for the full financial year. A company that has not maintained monthly accounting has a catch-up accounting obligation that must be resolved before the annual report can be compiled. The cost of catch-up accounting is always higher than the cost of maintaining monthly bookkeeping throughout the year. Companies that miss the 31 May deadline face administrative penalties from the Centre of Registers.
Dedicated Lithuanian accountant registered with VMI, English-language communication, real-time financial dashboard, monthly bookkeeping, VAT, payroll, and annual report. From EUR 90/month.
Monthly and annual deadlines for a Lithuanian UAB with standard activity
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15th monthlySoDra declaration and payment Monthly payroll declaration and contribution payment for companies with employees. Employee social insurance (19.5%), personal income tax deducted from salary, and employer contribution (1.77%) all due simultaneously.
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25th monthlyVAT return to VMI (if VAT-registered) Monthly VAT return covering all supplies and input VAT for the previous month. Standard rate 21%. Restructured reduced rates (12% and 5%) from 2026.
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15 JuneAnnual Corporate Income Tax return to VMI CIT return for the previous calendar year. Rate 17% standard, 7% small company, 0% startup (first two periods from 2026). Advance CIT payments required during the year for larger companies.
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31 MayAnnual financial report to Centre of Registers Balance sheet, profit and loss, notes, management commentary. Requires complete monthly bookkeeping for the full year. Penalties for late submission.
"The founders who avoid accounting problems in Lithuania are not the ones who know the most about VMI rules. They are the ones who started monthly bookkeeping from the date of registration and never stopped."
Full-scope accounting for foreign-owned Lithuanian UABs, from EUR 90 per month
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The specific risks of accounting for a foreign-owned Lithuanian UAB without local expertise
The accounting obligation for a Lithuanian UAB begins at registration, not at first revenue. A company registered in October 2026 with no activity until January 2027 still has monthly VMI declaration obligations from October 2026. Those zero-activity months must be declared. An accountant engaged from January 2027 who discovers three months of undeclared zero-activity periods must file retrospective declarations, which carries penalty risk from VMI and additional accounting cost.
1Office Lithuania starts the accounting engagement from the date of company registration, not the date of first activity. Monthly filings are maintained correctly from month one, even for periods of zero activity.
A non-EU company making taxable supplies in Lithuania without a permanent establishment is generally required to appoint a Lithuanian fiscal representative. The fiscal representative takes on joint and several liability for the company's Lithuanian VAT obligations, which is why this role requires a specialist provider with appropriate insurance coverage. It is not a role that can be filled by an informal contact in Lithuania.
EU companies supplying into Lithuania without a local establishment can register for Lithuanian VAT directly without a fiscal representative, through the One Stop Shop (OSS) mechanism for certain cross-border B2C supplies, or through direct registration for B2B supplies where the reverse charge does not apply. The correct mechanism depends on the nature of the supplies and the counterparties. 1Office Lithuania provides fiscal representative services and advises on the correct VAT registration mechanism for each client's situation.
If your Lithuanian UAB is registered and not yet connected to a professional accounting service, the position to establish is: what has been filed since registration, and what has not. VMI and SoDra both maintain online portals where the company's declaration history can be reviewed. Any missing declarations need to be filed retroactively before the company can transition to ongoing monthly accounting without a liability tail.
1Office Lithuania conducts a compliance review for new accounting clients at the start of the engagement. This identifies outstanding declarations, unfiled periods, and any open positions with VMI or the Centre of Registers before the ongoing monthly service begins. The earlier a founder engages an accountant, the lower the catch-up cost. A company registered six months ago with no accounting has six months of filings to resolve. A company registered six years ago in the same position has a materially more complex and expensive situation.
Frequently asked questions about accounting services in Lithuania
Do I need an accountant for my Lithuanian UAB?
Yes. Every Lithuanian UAB has a legal obligation to maintain accounting records from registration, file monthly VMI declarations, submit VAT returns where applicable, process payroll through SoDra, and prepare an annual financial report by 31 May. These obligations cannot be met without a qualified Lithuanian accountant or a registered accounting service provider. 1Office Lithuania provides full accounting services from EUR 90 per month.
What does accounting for a Lithuanian company include?
Accounting for a Lithuanian UAB includes monthly bookkeeping of all transactions, VAT return filing by the 25th each month if VAT-registered, monthly VMI income tax declarations, payroll processing and SoDra declarations for employees, preparation and filing of the annual financial report with the Centre of Registers, and ongoing guidance on corporate income tax, dividend tax, and compliance requirements.
How much do accounting services cost in Lithuania?
At 1Office Lithuania, accounting services start from EUR 90 per month. The exact monthly fee depends on transaction volume, VAT registration status, and payroll requirements. Contact 1Office Lithuania for a personalised quote based on your company's activiup, and document archiving preparation. The annual financial report is quoted separately based on company complexity and whether monthly accounting has been maintained.
What is the annual report deadline for a Lithuanian company?
The annual financial report must be submitted to the Centre of Registers by 31 May each year, covering the previous calendar year. All monthly bookkeeping must be complete before the annual report preparation can begin. Companies with incomplete monthly accounting must have catch-up accounting completed first, which adds cost and time to the process.
Can a foreign owner manage Lithuanian company accounting remotely?
Yes. 1Office Lithuania provides full accounting services entirely remotely and in English. The dedicated accountant communicates in English, the online dashboard provides real-time access to financial reports and payroll data, and all filings with VMI, SoDra, and the Centre of Registers are handled by the 1Office team. Documents are accepted in Lithuanian, Russian, and English.
What is outsourced accounting for a Lithuanian company?
Outsourced accounting means the company's accounting obligations are handled by an external registered accounting service provider rather than an in-house accountant. In Lithuania, this requires the provider to hold professional liability insurance. 1Office Lithuania provides outsourced accounting for Lithuanian UABs, covering all monthly and annual obligations, with the company owner retaining full visibility through the online dashboard.
What are payroll obligations for a Lithuanian company with employees?
A Lithuanian UAB with employees must register with SoDra, calculate and deduct employee social insurance (19.5%), calculate and deduct income tax (20% standard rate), pay employer social insurance (1.77% in 2026), file monthly SoDra declarations by the 15th, and pay all contributions by the 15th. Payroll processing is a monthly obligation from the first employee's first salary.
1Office Lithuania accounting is now open to new clients.
Dedicated VMI-registered accountant in English. Monthly bookkeeping, VAT, payroll, SoDra, annual report. From EUR 90/month. Personalised quote based on your company activity. Existing companies welcome.
About this article
Written and reviewed by the 1Office Lithuania accounting and advisory team. All VMI obligations, SoDra contribution rates, VAT rules, and CIT rates reflect current Lithuanian law as of September 2026, including the January 2026 VAT restructuring and the 2026 CIT rate changes. Service pricing reflects published 1Office Lithuania rates as of September 2026.
Published September 2026 · 1Office Lithuania · T. Narbuto 5, Vilnius LT-08103 · [email protected]
Sources and references: Lithuanian Law on Accounting (Buhalterines apskaitos istatymas); VMI State Tax Inspectorate guidance on declarations and CIT obligations; SoDra State Social Insurance Fund Board contribution rates 2026; Centre of Registers (Registru centras) annual report deadline and requirements; Lithuanian VAT law and 2026 VAT rate restructuring; 1Office Lithuania accounting service page (1office.co/lithuania/services/accounting-services-lithuania/); 1Office Lithuania client accounting data 2024 to 2026.
