🇪🇪 COUNTRY A Estonia VS 🇱🇹 COUNTRY B Lithuania

Estonia and Lithuania are both Baltic tech success stories with different tax approaches. Estonia maintains its famous 22% flat rate (after an €8,400 annual basic exemption) with e-Residency program and 0% corporate tax on retained earnings. Lithuania's 2026 rates are 20% (up to 36 times the average monthly wage, about €83,237), 25% (up to about €138,729) and 32% above, but employee Sodra and health contributions of 19.5% make its total burden heavy. Figures below are income tax plus employee social contributions for a single resident employee on wages (Estonia including the default 2% second-pillar pension). At €50,000: Estonia charges about €10,556 (21.1%), Lithuania about €19,750 (39.5%). Estonia is cheaper by about €9,194 a year at this level, and by more at higher incomes. Estonia's corporate advantages (0% on retained earnings) also make it better for entrepreneurs. Lithuania has the larger economy and Vilnius is gaining reputation as a fintech hub (Revolut, Vinted). Choose Estonia if: you want the lower personal tax burden, e-Residency benefits, startup ecosystem, or plan to retain profits in company. Choose Lithuania if: you prefer a larger city, work in fintech, or other factors outweigh the higher tax.