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 (draft No XVP-440(2)) 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.

Rimas Rudaitis, Adviser, Press Office, Information and Communication Department, tel. +370 5 209 6132, e-mail: rimas.rudaitis@lrs.lt