The taxes payable by asylum seekers and foreigners whose asylum applications were rejected are State Social Insurance (VSD) and Personal Income Tax (GPM). These workers do not have the option of paying compulsory health insurance (PSD). By paying VSD, they are entitled to a sickness benefit, but only essential medical care is provided. Foreigners or their employers can rely on private medical institutions for preventive health checks, sickness certificates or other medical services. These services are not available in public health facilities.
The VSD contribution depends on the type of employment contract concluded. The GPM is provided for in the Law on Personal Income Tax of the Republic of Lithuania and normally amounts to 20%. Article 4 of the Law stipulates that a foreigner who has stayed for 183 days in a tax year becomes a permanent resident of the Republic of Lithuania for tax purposes.
Permanent residents of Lithuania are subject to the tax-free income rate (NPD). This means that after six months of work, part of the foreigner’s income becomes tax-free – no tax is levied on it. The maximum amount of tax-free income €625 applies to minimum wage earners. In all other cases, the NPD is calculated according to a set formula.