Do I have to file an annual tax return if tax was already withheld?
It depends: some residents must file an annual income-tax return even if the employer already withheld the tax. The myth that "if tax was taken from my salary, I do not need to declare" often catches people out with an unexpected top-up. The annual return adds all income together and recalculates the tax: if during the year you had income from several sources, exceeded the 60 average-wage (60 VDU) threshold (2025 — €126,532.80) above which the 32% rate applies, received too much tax-free allowance (NPD), or had individual-activity, rental or securities-sale income, you may have to pay more. The return is due by 1 May of the following year (2025 income — by 4 May 2026, as 1 May falls on a holiday and weekend). From 2026 a new 20/25/32% progressive scale takes effect, making the annual return even more important.
📋 The rules
- Annual return — by 1 May of the next year (2025 income — by 2026-05-04)
- Base GPM rate — 20%; above 60 VDU (2025 — €126,532.80) — 32%
- Filing is required for additional or untaxed income, individual activity, rental or property-sale income
- Any overpayment (from NPD or reliefs) is refunded by VMI if the return is filed on time
- From 2026 — a new progressive 20/25/32% scale (applied to 2026 income)
🔓 Exceptions
- If all income came from a single employer, stayed under 60 VDU and the NPD was applied correctly, a top-up is usually avoided, but a return is still worth filing to claim reliefs
- Holders of an investment account have a longer deadline — until 1 June
- Using tax reliefs (pension saving, life insurance) can mean part of the GPM is refunded
⚠️ Penalties & fines
An unfiled or late return means default interest, a fine and a lost refund. If the tax is not paid on time, default interest is charged for each day of delay, and for failing the filing duty the Law on Tax Administration and the Code of Administrative Offences provide fines. VMI has the right to reassess your income from the data it holds and calculate the tax for you — usually not in your favour. What nobody expects: the top-up hits precisely those who worked in several places or crossed the 60 VDU threshold late in the year, because each employer applied the 20% rate separately, while the annual return adds all income together and imposes 32% on the part above the threshold. You can also get money back: file a correct return on time and any overpayment from NPD or reliefs is refunded — for 2025 income usually by the end of July.
📎 Official sources
- VMI · declaring residents' income →
- e-seimas · Law on Personal Income Tax →
- VMI · GPM rates and changes from 2026 →
❓ Frequently asked
Do I have to declare income if I only work under an employment contract?
If all your income came from one employer, you stayed under the 60 VDU threshold and the NPD was applied correctly, you usually do not need to pay extra. Even so, it is worth filing to claim tax reliefs and get a refund.
By when must I file the annual return?
The annual income-tax return is due by 1 May of the following year. The 2025 income must be declared by 4 May 2026, because 1 May is a public holiday followed by a weekend, so the deadline moves to the next working day.
When does the 32% GPM rate apply?
The higher 32% rate applies to the part of annual income above 60 average wages (60 VDU) — for 2025 that is €126,532.80. Because each employer applies 20% during the year, crossing the threshold means topping up the difference in the annual return.
What changes for GPM from 2026?
From 2026 a new progressive scale of 20%, 25% and 32% takes effect and applies to various types of income. These rates apply to 2026 income, declared in 2027, while 2025 income is still taxed under the earlier rates.
What happens if I file late?
If the tax is not paid on time, default interest is charged, and there are fines for failing the filing duty. In addition, VMI may calculate the tax from its own data, and a late filing means losing the chance to reclaim any overpayment on time.
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