Seimas approves changes in reduced VAT rates

Press release, 17 June 2025 (News ● Photos ● Broadcasts and videos)

From 1 January 2026, Lithuania will apply two reduced rates of value added tax (VAT) of 5 % and 12 %. The relevant amendments to the Law on Value Added Tax were adopted by 77 votes in favour, 19 against, and 16 abstentions.

Under the amendments, the reduced VAT rate for books and non-periodical publications will be lowered from 9 % to 5 %, while the 9 % reduced VAT rate applied to accommodation, passenger transportation, and arts and cultural events will be increased to 12 %.

The Seimas also decided to abolish the reduced VAT rate for district heating, hot water supply, and firewood, thereby increasing the VAT rate on these from 9 to 21 %.

According to Rimantas Šadžius, Minister of Finance, this exemption was inappropriate and not targeted at addressing a specific social issue. ‘The government is prepared to raise the asset limits that currently restrict access to heating compensation and other utility-related benefits,’ Mr Šadžius stated earlier.

This initiative was considered as part of a broader package of tax amendments aimed at securing additional defence funding.