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Lithuania

#5 overall · Score 82.6 / 100 · unchanged from 2025

Overall

#5

82.6 / 100

unchanged from 2025

Corporate

#3

84.8 / 100

unchanged from 2025

Individual

#10

80.8 / 100

down one place from 2025

Consumption

#23

54.0 / 100

up two places from 2025

Property

#6

74.7 / 100

up one place from 2025

Cross-border

#16

72.6 / 100

unchanged from 2025

Notable Changes from 2025

Lithuania raised its corporate tax rate from 16 to 17 percent while substantially improving the competitiveness of its corporate tax base by introducing permanent full expensing for machinery, equipment, and intangible rights. Lithuania also broadened its VAT base. Lithuania ranks 5th, the same as last year.

Strengths

  • Lithuania provides full expensing for business investments in machinery and intangibles, as well as the fourth-best cost recovery for buildings in the OECD.
  • Lithuania's corporate tax rate is 17 percent, well below the OECD average of 24.2 percent.
  • Lithuania's taxes on labor are flatter than average, allowing the government to raise revenue from taxes on workers with very few distortions.

Weaknesses

  • Lithuania has tax treaties with just 58 countries, below the OECD average (75 countries).
  • Lithuania has both a patent box and a super deduction for Research and Development expenditures.
  • The threshold at which VAT applies is significantly higher than the OECD average threshold, contributing to a distortive VAT design.

Component Scores

Lithuania category scores out of 100Corporate Taxes: score 84.8, rank 3. Individual Taxes: score 80.8, rank 10. Consumption Taxes: score 54.0, rank 23. Property Taxes: score 74.7, rank 6. Cross-Border Tax Rules: score 72.6, rank 16255075100Corporate Taxes: 84.8 (rank 3)Individual Taxes: 80.8 (rank 10)Consumption Taxes: 54.0 (rank 23)Property Taxes: 74.7 (rank 6)Cross-Border Tax Rules: 72.6 (rank 16)CorporateIndividualConsumptionPropertyCross-border
Category Rank Score vs 2025
Corporate Taxes #3 84.8 unchanged from 2025
Individual Taxes #10 80.8 down one place from 2025
Consumption Taxes #23 54.0 up two places from 2025
Property Taxes #6 74.7 up one place from 2025
Cross-Border Tax Rules #16 72.6 unchanged from 2025

Ranking Changes, 2014–2026

Lithuania's best overall rank was 5th and its worst was 10th. It ranks 5th in 2026.

Overall rank by year for LithuaniaLithuania: 2014 rank 8, 2015 rank 9, 2016 rank 8, 2017 rank 7, 2018 rank 6, 2019 rank 10, 2020 rank 9, 2021 rank 9, 2022 rank 8, 2023 rank 6, 2024 rank 5, 2025 rank 5, 2026 rank 52014201520162017201820192020202120222023202420252026Lithuania 2014: rank 8Lithuania 2015: rank 9Lithuania 2016: rank 8Lithuania 2017: rank 7Lithuania 2018: rank 6Lithuania 2019: rank 10Lithuania 2020: rank 9Lithuania 2021: rank 9Lithuania 2022: rank 8Lithuania 2023: rank 6Lithuania 2024: rank 5Lithuania 2025: rank 5Lithuania 2026: rank 5#8#5

OECD Context

Each row places all 38 countries on a 0–100 score scale for one measure. Lithuania is highlighted; the dashed line is the OECD median.

All 38 Countries' Ranks

Overall and category ranks for all 38 countries
CountryOverallCorporateIndividualConsumptionPropertyCross-border
Estonia#1#2#1#24#1#7
Latvia#2#1#8#22#4#6
New Zealand#3#31#7#1#8#14
Switzerland#4#7#9#4#36#2
Lithuania#5#3#10#23#6#16
Luxembourg#6#20#21#7#15#5
Czech Republic#7#9#4#32#5#11
Australia#8#29#14#9#3#23
Turkey#9#21#6#15#22#8
Hungary#10#5#3#38#23#4
Israel#11#11#31#11#10#18
Slovak Republic#12#24#2#33#7#17
Sweden#13#6#18#26#9#12
Costa Rica#14#35#13#6#11#29
Canada#15#17#28#8#25#28
Netherlands#16#23#30#14#20#3
United States#17#8#17#3#27#37
Austria#18#18#27#17#17#10
Germany#19#30#34#13#12#9
Norway#20#15#29#27#16#15
Mexico#21#28#26#12#2#38
Finland#22#10#24#28#21#24
Greece#23#22#5#29#30#19
Chile#24#32#23#10#13#36
Slovenia#25#14#12#30#24#30
Korea#26#26#38#2#31#34
Belgium#27#16#15#25#28#21
Japan#28#36#35#5#26#31
Ireland#29#4#36#35#18#27
United Kingdom#30#25#22#34#33#1
Denmark#31#19#37#20#14#32
Poland#32#12#11#36#29#25
Portugal#33#34#19#21#19#33
Iceland#34#13#32#19#34#26
Spain#35#33#20#18#35#20
Italy#36#27#16#37#38#22
Colombia#37#37#25#16#37#35
France#38#38#33#31#32#13

Among European Peers

Lithuania ranks 4th of 27 European OECD members on the overall index.

Source: 2026 International Tax Competitiveness Index.

Notes on the Data

The 2026 Index uses the most up-to-date data available as of July 2026. Data may not reflect changes in countries making rapid reforms.

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About the Authors

Alex Mengden Tax Foundation
Expert

Alex Mengden

Economist

Alex Mengden is an Economist at the Tax Foundation, where he focuses on international tax issues and tax policy in Europe. He holds a BA in philosophy and economics from the University of Bayreuth and an MSc in economics from the Ludwig Maximilian University of Munich.

Tax Foundation Staff

Luis Zarka

Transatlantic Tax Fellow

Luis Zarka was a 2026 Transatlantic Tax Fellow with the Tax Foundation’s Center for Global Tax Policy.

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Vice President of Communications

Jesse Solis is Vice President of Communications at the Tax Foundation, where he leads the communications team and works to build coverage of Tax Foundation’s experts and their work across the globe. He joined the team in 2021 as Communications Manager and became Communications Director in 2024.