What is the expense reimbursement policy in Lithuania?

This article explains how employees can claim reimbursement for business‑related expenses in Lithuania, including mileage, travel costs, per diems, and required documentation. Reimbursements must comply with Lithuanian tax rules to remain non‑taxable.

1. Travel & Mileage (Personal Vehicle Use)

Official Mileage Rate

Lithuania applies a widely accepted tax‑free mileage rate for employees using a personal vehicle for business:

• €0.30 per km (standard maximum)

This rate is generally treated as the upper tax‑free limit.
Employers may not exceed this rate tax‑free unless they can prove higher actual operating costs, which is rare and complex.

Mileage Log Requirement

All mileage claims must be supported by a mileage log showing:

• Date of travel
• Start and end location
• Odometer readings
• Business purpose
• Total kilometres driven

Mileage reimbursed must reflect actual business kilometres only.

2. Parking, Tolls & Fuel

• Parking tickets and tolls must be claimed separately
• Receipts are required
• These costs are not included in the €0.30/km mileage rate

Important: No Double Reimbursement

• If you claim mileage, you cannot also claim fuel receipts
• Double reimbursement (fuel + mileage) is not allowed and may result in taxation

3. Business Travel Rules

To be reimbursable and non‑taxable, travel must be:

• Business‑related
• Justified
• Pre‑approved under company policy

There are no statutory caps on travel expenses, but companies commonly:

• Limit reimbursement to local or domestic travel, unless international travel is explicitly approved
• Apply reasonableness standards for cost and duration

4. Transportation & Accommodation

The following may be reimbursed when business‑related and supported by receipts or invoices:

Transportation

• Air travel (economy class or reasonable fare expected)
• Bus, train, and public transport
• Taxi or ride‑share services
  • Taxi use often requires justification (e.g., late hours, no public transport, urgent meeting)
• Rental cars (requires:
  • Invoice
  • Business justification
  • Separate fuel receipts if mileage is not claimed)

Accommodation

• Hotels or short‑term lodging
• Invoice or receipt required

5. Invoicing & Documentation Requirements

To qualify as tax‑free reimbursement, each expense must include:

• Supplier invoice or receipt
• Supplier name
• Supplier Tax ID / VAT number
• Date of expense
• Amount
• Description of the service or goods

In addition, the expense claim form should clearly state:

• Employee name
• Business purpose of the expense

Company Entity

Where possible, invoices should be issued to:
Horizons Global Technology Lithuania UAB

6. Simplified Receipts (Small Expenses)

Lithuanian rules allow simplified documentation for small expenses:

• Up to €100: Simplified receipt is acceptable
• Above €100: Full invoice required, including supplier VAT ID

Expenses above €100 without a compliant invoice may become taxable.

7. Common Tax‑Free Reimbursable Expenses

With proper documentation, the following are generally non‑taxable:

• Business travel (airfare, public transport)
• Accommodation and hotels
• Business meals and client entertainment (strict documentation required)
• Taxi or ride‑share services
• Parking and tolls
• Mileage reimbursement (up to €0.30/km)
• Work‑related supplies, tools, or equipment
• Conferences, seminars, and training related to your role

8. Per Diems (Daily Allowances)

Daily per diems may be reimbursed tax‑free when:

• The business trip is outside the regular workplace
• The trip lasts more than 8 hours
• The per diem amount follows government‑approved rates

Typical 2025 Per Diem Rates

• Domestic travel: €15 per day
• International travel: Country‑specific, commonly €30–€60 per day

Amounts exceeding official rates may be treated as taxable income.

9. Entertainment, Gifts & Special Expenses

Business / Client Entertainment

May be tax‑free if:

• Directly related to business
• Reasonable in cost
• Documented with:
  • Guest names
  • Business purpose
  • Receipt or invoice

Gifts

• Small promotional gifts (< €50) are generally tax‑free
• Higher‑value gifts may be taxable to:
  • The employee, or
  • The company (depending on purpose and recipient)

Wellness & Personal Expenses

Generally treated as taxable benefits, including:

• Gym memberships
• Yoga or swimming
• Medical bills

Exceptions may apply if:

• Provided equally to all employees
• Structured as a compliant company‑wide wellness program
  (Tax may still apply in many cases.)

10. VAT Treatment

• Standard VAT rate: 21%
• VAT treatment follows normal Lithuanian VAT rules
• VAT may be recoverable only if:
  • Invoice is compliant
  • Expense is business‑related
  • The company is VAT‑registered

11. Submission & Compliance Rules

• Employees must submit expense claims within the company deadline (commonly 30 days)
• Expenses without proper proof may be:
  • Rejected, or
  • Treated as taxable income