UAB Taxes in 2026: How Much Will You Actually Pay?
A private limited company (UAB) is one of the most popular business forms in Lithuania. It provides greater credibility, a clear structure, and a convenient model for owner compensation. However, many founders typically ask: how much tax will I actually have to pay?
In this article, we clearly break down:
✔ profit tax
✔ VAT
✔ owner compensation
✔ dividends
✔ how much remains “in hand”
1️⃣ Profit Tax for UAB in 2026
Profit tax is calculated on earned profit, not on turnover.
| Situation | Profit Tax Rate |
| New UAB (meets conditions) | 0% for the first 2 years |
| Small UAB (revenue ≤ €300,000) | 7 % |
| Other UAB | 17 % |
Example:
If a UAB earned €60,000 in profit and the 17% rate applies:
➡ profit tax = €10,200
➡ €49,800 remains for distribution or reinvestment
2️⃣ When Does a UAB Become a VAT Payer?
VAT registration is mandatory when:
- annual revenue exceeds €45,000
- or trade is conducted with EU partners in certain cases
VAT is not a company expense, but it affects pricing and cash flows.
3️⃣ How Can a UAB Owner Receive Money?
This is where the most important part begins – the method of withdrawing money changes the final tax burden.
🟢 1. Salary (Employment Income)
The owner can be employed by the UAB and receive a salary.
The following is calculated from gross salary:
- Personal Income Tax (GPM) – 20–32% (depends on income level)
- Social insurance contributions (VSD + PSD)
- Employer social contributions
From €1,000 gross, approximately €600 often remains in hand.
👉 Salary is beneficial when you need:
- official income for the bank
- social guarantees (sickness, pension, maternity)
🟡 2. Dividends (Profit Distribution)
This is the most commonly used method to withdraw profit.
| Indicator | Amount |
| Dividend GPM | 15 % |
| Social contributions | NONE |
Example:
From €40,000 in dividends → GPM €6,000
➡ the owner receives €34,000 in hand
Dividends are almost always more efficient than salary if the goal is to withdraw profit.
🔵 3. Profit Retained in the Company
If profit is not distributed:
✔ no GPM is paid
✔ funds can be used for investments
✔ this strengthens the company’s financial stability
4️⃣ How Much Actually Remains for the Owner?
Example: UAB earns €50,000 in profit
| Step | Amount |
| Profit tax (17%) | –€8,500 |
| Profit remaining | €41,500 |
| Dividend GPM (15%) | –€6,225 |
| Owner receives | €35,275 |
This means that the total tax burden from profit to personal income is approximately 29–30% when using dividends.
5️⃣ When Is a UAB Favorable from a Tax Perspective?
A UAB becomes financially convenient when:
✔ the owner wants a stable salary
✔ hiring employees is planned
✔ the business is growing and profit is withdrawn as dividends
✔ a better image is needed for banks or partners
6️⃣ Common Mistakes
❌ Assuming that salary and dividends are taxed equally
❌ Forgetting that profit tax is paid before dividends
❌ Not calculating the total tax burden from profit to personal income
🧠 Brief Conclusion
| Situation | Often Most Beneficial |
| Low profit, new company | UAB with 0% or 7% profit tax |
| High profit | Dividends |
| Official income needed | Salary |
| Profit reinvested | Retain in the company |
🎯 Want to Know Your Actual Numbers?
Every UAB situation is different — everything depends on profitability, salary amount, and withdrawal model.
👉 By registering for a detailed consultation, you will receive an individual UAB tax calculation completely free of charge.
We will show you:
- how much profit tax you will pay
- how much salary will cost
- how much will remain after dividends
- which model is financially best for you
Register for a free consultation and make decisions based on numbers, not guesswork.
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