Ministry of Finance proposes to approve the proposals of the members of the Seimas to adjust the application of PIT to income from agricultural activities

The Ministry of Finance submits a conclusion to the Government, proposing to approve the draft amendments to the Law on Personal Income Tax prepared by the Members of the Seimas, which aim to more clearly and precisely regulate the taxation of personal income from agricultural activities from 1 January 2026.

“The provisions of the law that have been adopted but have not yet entered into force may create preconditions for their unclear application. Considering this, we must accurately and clearly link individual taxation conditions to the income itself, and not to the taxpayer’s status. This will ensure transparent, logical and constitutionally justified income taxation,” Minister of Finance Kristupas Vaitiekūnas states.

Currently, the procedure that will enter into force on 1 January 2026 provides for individual income tax rates for the income of persons engaged in agricultural activities, but it is not clearly detailed how these provisions should be applied to income not related to agricultural activities.

According to the Minister, the proposed amendments would clearly establish that the progressive personal income tax rates of 15 % and 20 % apply only to income from agricultural activities, including income received from the sale of assets related to this activity. This income would not be included in other income, which is subject to progressive tax rates of 20%, 25 % and 32 %.

At the same time, taking into account the fact that individual rates apply to income from agricultural activities, a separate mechanism for calculating the tax credit applied to them would be provided, maintaining a minimum effective rate limit of 5 % for annual income not exceeding EUR 20,000, and a 15 % limit when income increases to EUR 35,000. The procedure for recognizing allowable deductions and tax losses for this income would also be clarified.

The amendments would enter into force on 1 January 2026.

Last updated: 24-11-2025

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