Latvia (MUN & Pašnodarbinātais) vs. Lithuania (Individuali Veikla) — 2026 Tax Comparison
Compare 2026 self-employed net income, social security caps, family allowances, and VAT thresholds between Latvia (MUN & Pašnodarbinātais) and Lithuania (Individuali veikla pagal pažymą).
- Presumed Expenses vs. Revenue/Actual Bookkeeping: Lithuania grants an automatic uncapped 30% flat-expense deduction with zero receipts, whereas Latvia’s MUN taxes gross revenue at 25% (≤40k €) and General Pašnodarbinātais requires documented expenses.
- Income Tax & Startup Relief: Lithuania’s PMK tax credit lowers GPM to 5%–20% below 42,500 € taxable profit alongside a Year-1 0% VSD holiday, outperforming Latvia’s 25% MUN and 25.5% IIN across single-earner B2B tiers.
- Dependents & VAT: Latvia offers 3,000 €/yr non-taxable allowances per child or qualifying spouse and a slightly higher 50,000 € domestic VAT cap (21% PVN) vs. Lithuania’s 45,000 € cap (21% PVM).
- Which keeps more net income at 60,000 € in 2026: Latvia or Lithuania?
- At 60,000 € annual B2B revenue with low actual expenses in steady state, Lithuania’s Individuali veikla (30% flat deduction + 20% GPM + Sodra on 90% of profit) retains 44,369 € net (26.1% burden) vs. 40,444 € net (32.6% burden) under Latvia’s General Pašnodarbinātais—3,925 €/yr higher net take-home pay (rising to 49,102 € in Year 1 with Lithuania’s 0% VSD holiday).
- How do family tax credits compare between Latvia and Lithuania for freelancers?
- Latvia’s General Pašnodarbinātais grants a 3,000 €/yr (250 €/mo) IIN tax-base deduction per dependent child or qualifying spouse (~765 €/yr tax saved each). Lithuania’s Individuali veikla has 0 € income tax credits for children (paying universal child benefits separately) and requires 80.48 €/mo PSD for an uninsured spouse unless state-insured via young children.
- How do VAT thresholds compare between Latvia and Lithuania in 2026?
- Both countries levy a 21% standard VAT rate, with Latvia exempting domestic turnover up to 50,000 €/yr (PVN) and Lithuania exempting up to 45,000 €/yr (PVM).
Official 2026 Statutory Sources & Verification
Verified against official 2026 statutory tax & social contribution rules (Last verified: Nov 2026).