Personal income tax relief on life insurance

Personal income tax relief is the opportunity to recover a part of the premiums paid to the accumulation fund. The amount of personal income tax relief depends on the premiums paid under your term life insurance contracts and to pension funds. Up to EUR 300 of the paid personal income tax can be recovered per year.

If you pay life insurance premiums, you can take advantage of the personal income tax relief for investment insurance and you can get back up to EUR 300 of the paid personal income tax every year. A permanent resident of Lithuania may deduct life insurance premiums paid for himself/herself, his/her spouse, minor children (adopted children, foster children), disabled children (adopted children, foster children) under the age of 18 years and older under a life insurance contract which provides that the insurance premium is paid not only upon the occurrence of the insured event, but also after the expiry of the insurance contract. Important: the relief is applicable to the contracts concluded till 31 December 2024.

Personal income tax can be recovered by submitting the Annual Income Tax Return to the State Tax Inspectorate (STI).
After submitting the return, the tax relief is calculated and the amount of personal income tax overpayment is transferred to the specified bank account within three months from the submission of the return.

Residents who have concluded and accumulate funds under the contracts of the Term Insurance Fund, the Investment Insurance Fund, Third-Pillar Pension Fund till 31 December 2024 are entitled to use the personal income tax relief, when contributions are paid for oneself, a spouse or children under the age of 18 years and older disabled children. The total amount of all contributions/expenses paid by the end of the year for which income tax can be recovered may not exceed 25% of the resident’s annual taxable income, and the total amount of life insurance and pension accumulation contributions cannot exceed EUR 1,500.
It is provided that after the amendments to the Law on Personal Income Tax come into force, the personal income tax relief will be gradually waived: it will be valid for another 10 years if the contract is concluded till 31 December /2024.

The State promotes voluntary savings, taking care of one’s own future and the future of loved ones by providing the opportunity to recover up to EUR 300 annually. 

• You must declare income and expenses for life insurance for the previous calendar year to the State Tax Inspectorate till May 1 of the current year.
• Residents of Lithuania who actually pay premiums under investment life insurance and/or to pension funds are entitled to the personal income tax (hereinafter referred to as the “PIT”) reliefs.
• The tax relief for the resident is calculated on the part of the taxable income to which 15, 20 or 27 per cent of the PIT rate was applied.
• The relief is applied to the benefit of oneself, a spouse, a minor child or a disabled foster child by transferring the amount of premiums, which, including other income tax-reducing expenses, does not exceed EUR 1,500 and 25 per cent of the annual taxable income. Important: the relief is applicable to the contracts concluded till 31 December 2024.

More information on tax reliefs here.