Individual activity or business certificate for beauty specialists in Lithuania, 2026

When you start working for yourself in Lithuania — as a hairdresser, nail technician, beautician or massage therapist — the first question is usually not about clients but about tax: individual activity (individuali veikla) or a business certificate (verslo liudijimas)? Both changed in January 2026, so advice you heard last year may be out of date.

This article is a general guide based on the 2026 rules published by the State Tax Inspectorate (VMI), not personal advice. Before registering, check your situation with an accountant or with VMI.

Business certificate: a fixed tax paid in advance

A business certificate (VL) is a fixed income tax paid in advance for a specific activity. Beauty services are on the list of activities eligible for a business certificate.

• The price doesn't depend on income. The fixed amount is set by the municipality and varies by city and activity. You'll find yours in VMI's business certificate calculator.
• You pay in advance — even if you had few clients that month. A certificate can also be bought for less than a full year.
• Income limit: €50,000 a year (from 2026). Income up to that amount is covered by the fixed tax; anything above is taxed as individual activity income.
• No expense deductions. Rent, materials and equipment don't reduce the tax.
• Bookkeeping is simple but not zero: income has to be recorded the way VMI requires.
• Social security (Sodra) contributions are paid separately — check the amount in Sodra's calculator.

Individual activity: you pay on profit

Individual activity (IV) is registered with VMI, and tax is calculated on taxable profit: income minus expenses.

You can count expenses in two ways:

• actual expenses — rent, materials, equipment, training, backed by documents;
• 30 % of income — with no documents at all, if your actual expenses are lower.

Income tax from 2026 (according to VMI):

• taxable profit up to €20,000 a year — effectively 5 %;
• from €20,000 to €42,500 — the rate rises gradually from 5 % to 20 % (a shrinking tax credit applies);
• above €42,500 — no credit; IV profit is added to your other income and taxed on the general 20 / 25 / 32 % scale.

On top of income tax, Sodra contributions (VSD and PSD) are paid on IV profit. If you aren't insured some other way (for example through an employment contract), PSD is due even in months with no income.

Two examples

1. Nail technician, €24,000 income a year, few expenses. Uses the 30 % expense option: 24,000 − 7,200 = €16,800 taxable profit. Profit under €20,000 → income tax 5 %: €840 (+ Sodra contributions).

2. Hairdresser, €36,000 income a year, €8,000 actual expenses (rent, colour). Taxable profit: €28,000. Using VMI's credit formula, the tax is about €2,890, roughly 10 % of profit (+ Sodra contributions).

Compare this with the business certificate price in your municipality and with Sodra contributions in both cases — only then will you see the real difference.

Which suits whom

A business certificate usually suits you if:

• your income is stable and you already know the clients will come;
• you have few expenses (you rent a chair and bring your own materials);
• you want the simplest possible bookkeeping.

Individual activity usually suits you if:

• you're just starting and income is uncertain — you only pay on what you earn;
• you have large expenses (premises rent, expensive materials, equipment);
• you work in several areas or your income swings with the seasons.

When the salon grows, you hire staff or your income approaches €50,000, it's worth considering a small partnership (MB) or a private limited company (UAB). That's a separate conversation with your accountant.

Don't forget the VAT threshold

Whichever you choose: if income from VAT-taxable activity over the last 12 months exceeds €45,000, you're obliged to register for VAT (PVM). For beauty services this matters once you have a busy client flow. Track income monthly, not just at year end.

What to do tomorrow

1. Write down your expected annual income and expenses — as realistically as you can.
2. Check the business certificate price for your municipality in VMI's calculator.
3. Calculate IV tax both ways (actual expenses and 30 %).
4. Add Sodra contributions in both cases and compare.
5. Take these numbers to an accountant — the conversation will be short and useful.

Sources: VMI — income tax rates (LT), VMI — when you must register for VAT (LT). Information reflects the 2026 rules.