How can I work out 21% VAT quickly in my head?

To add: multiply the net price by 1.21. To extract: divide the gross price by 1.21. For example, €242 including VAT is €200 net plus €42 VAT.

How does the 12% rate differ from the old 9% rate?

From 1 January 2026 the 12% rate replaced the 9% reduced rate for accommodation, regular passenger transport and arts and culture events. Books are taxed at 5%.

Does everyone have to register for VAT?

No, only once taxable turnover over 12 months exceeds the threshold (currently €45,000). Consumers always pay VAT as part of the price.

Can these rates change?

Yes. This article reflects the 2026 rules. Always check rates, reliefs and thresholds on the tax authority's site, vmi.lt.

How to Calculate VAT: Formulas and 2026 Lithuanian Rates

VAT looks easy until you need to extract it from a final price: that is where people often make the mistake of simply subtracting 21 percent. This guide explains both directions, lists the 2026 Lithuanian VAT rates and gives worked examples with real numbers. Rates and exemptions can change, so check vmi.lt for important decisions.

What VAT is and who ultimately pays it

Value added tax (PVM in Lithuanian) is a consumption tax added to the price of goods and services at every stage of the supply chain. A VAT-registered seller collects it from the buyer and passes it to the state after deducting the VAT it paid to its own suppliers. The final consumer pays the full amount and cannot reclaim it.

2026 VAT rates in Lithuania

From 1 January 2026 the main rates are as below. Note that the former 9% reduced rate for accommodation, passenger transport and cultural events has been replaced by a 12% rate.

Rate	What it applies to (main cases)
21%	Standard rate: most goods and services (heating and firewood too, from 2026)
12%	Accommodation, regular passenger transport, visits to arts and culture institutions and events
5%	Printed and electronic books, non-periodic publications, certain medicines and medical aids
0%	Exports outside the EU, certain supplies to VAT payers in other EU states, international transport

Adding VAT to a net price

If you know the price without VAT, the gross price is: net × (1 + rate). At 21% the multiplier is 1.21.

Example: an item costs €250 net. VAT: 250 × 0.21 = €52.50. Gross price: 250 × 1.21 = €302.50. A hotel night at €60 net with the 12% rate costs 60 × 1.12 = €67.20 (VAT €7.20).

Extracting VAT from a gross price

This is where most mistakes happen: net = gross ÷ (1 + rate), not gross minus 21%. Subtracting 21% of the gross amount overstates the VAT and understates the net price.

Example: a receipt shows €605 including VAT. Net price: 605 ÷ 1.21 = €500. VAT: 605 − 500 = €105. If you wrongly calculated 605 × 0.21 you would get €127.05, which is €22.05 too much. A quick formula for the VAT portion is: gross × rate ÷ (100 + rate), for instance 121 × 21 ÷ 121 = €21.

Formula summary by rate

Rate	Net to gross	Gross to net	Example (€100 net)
21%	× 1.21	÷ 1.21	€121.00
12%	× 1.12	÷ 1.12	€112.00
5%	× 1.05	÷ 1.05	€105.00
0%	× 1.00	÷ 1.00	€100.00

Zero rate, exemption and registration

A 0% rate is not the same as being exempt. With a 0% rate (for example on exports) the seller stays a VAT payer and can deduct input VAT. Exempt activities (for example much of healthcare, education, financial and insurance services, and residential rent) are outside VAT, but the related input VAT generally cannot be deducted.

A company or self-employed person must register for VAT when taxable turnover over the last 12 months exceeds the threshold (currently €45,000). Smaller businesses may register voluntarily.

Common mistakes

Calculating VAT from a gross price as price × 21% instead of dividing by 1.21.
Combining items with different rates on one line: VAT is calculated separately for each rate group.
Rounding too early: calculate the full amount and round to cents only at the end, following invoice rules.
Using outdated rates: from 2026 accommodation and cultural events carry 12%, not 9%.