Topic: Lithuania Tax Authorities issued explanation on Bitcoin taxes (5% or 15%) (Read 760 times)

The State Tax Inspectorate under the Ministry of Finance of the Republic of Lithuania (hereinafter − STI under MF) announced an explanation on the income received from the purchase – sale of bit coins.

It was established that: 

- individuals‘ income received from  the purchase – sale of bit coins are taxed as income derived from individual activity (if it is not income received from realization of derivatives), if purchase – sale of the mentioned currency is made in order to get economic benefit (person performs this kind of activity for a continuous period of time and the performed activity complies with the set of criteria set for individual activity). Income from this kind of individual activity is taxed at personal income tax rate of 5 percent;
- from the Law on Personal Income Tax perspective (hereinafter – Law on PIT), bit coins are treated as an asset, therefore in cases, when the random income is received from sale of bit coins, such income is taxed as income from sale or other transfer to ownership of other asset (unspecified in Article 17(1) Paragraphs (28)(30)(53)(54) of the Law on PIT. It means that the difference between sale and purchase prices is taxed at personal income tax of 15 percent. In such cases, according to Article 17(1)(20) of the Law on PIT the sum of received income can be reduced by the amount of LTL 8 000 declaring the received income from the relevant tax year.

More information is available (in Lithuanian):
http://mic.vmi.lt/documentpublicone.do?id=1000129079

As a Lithuanian I welcome clarity in this area and happy about 5% tax only.