DT12152 - Double Taxation Relief Manual: Guidance by country: Lithuania: Treaty summary
The table summarises the provisions of the treaty as they relate to income beneficially owned by UK residents. The rate shown is the ‘treaty rate’ and does not reflect taxes chargeable under domestic law before relief is given under the provisions of the treaty. The ‘treaty rate’ is the maximum rate at which Lithuania is permitted to tax income in the relevant categories under the treaty. Rates chargeable under domestic law may be higher or lower.
In all cases other conditions for relief (e.g. beneficial ownership) will have to be met before relief is due under the treaty. The text of the treaty itself should be consulted for the full details. The text of the treaty can be found on gov.uk.
| Subject | Comments | Article |
|---|---|---|
| Portfolio dividends | 15% | 10 |
| Dividends on direct investments | 5% | 10 |
| Conditions for lower rate on dividends on direct investments | The beneficial owner must be a company which controls directly at least 25% of the voting power in the company paying the dividends | 10 |
| Property income dividends | 15% | 10 |
| Interest | 10% (Note 1) | 11 |
| Royalties | 0% (Note 2) | 12 |
| Government pensions | Taxable only in Lithuania unless the individual is a resident and national of the UK | 19 |
| Other pensions | Taxable only in the UK | 18 |
| Arbitration | No | N/A |
Note 1: Interest paid in the following circumstances is taxable only in the state of residence of the beneficial owner of the interest:
- where the payer is the Lithuanian Government, a political subdivision or a local authority thereof or an agency or instrumentality of the Lithuanian Government, political subdivision or local authority
- where the recipient is the UK Government, a political subdivision or a local authority thereof or an agency or instrumentality of the UK Government, political subdivision or local authority
- where the interest is paid in respect of a loan made, guaranteed or insured, or any other debt-claim or credit guaranteed or insured by the UK Export Credits Guarantee Department or by any organisation established in either Lithuania or the UK after the date of signature of this Convention and which is of a similar nature
- where the interest is paid in respect of a loan made, guaranteed or insured by the Bank of England or the Bank of Lithuania (Lietuvos Bankas)
- the interest is paid in respect of an indebtedness arising on the sale on credit, by an enterprise of the other Contracting State, of industrial, commercial or scientific equipment to an enterprise of the first-mentioned State, except where the sale or indebtedness is between related persons
Note 2: Under the 2001 Convention, Lithuania tax on royalties paid to a UK resident recipient who is the beneficial owner of the royalties is reduced to:
1. 5% of the gross amount where the royalties are for the use of industrial, commercial or scientific equipment
2. 10% of the gross amount of other royalties
However, a “most-favoured nation” provision in the 2001 Convention was triggered when the Lithuania/Japan Convention entered into force on 31 August 2018. The effect of this provision is that from 31 August 2018 no source state taxation is permitted under the 2001 Convention in respect of any category of royalties.