When a Lithuanian living and working in the USA started working at one of the Lithuanian universities, the person turned to TaxLink for help in order to find out how the salary received from the Lithuanian employer should be taxed correctly in order to avoid double taxation. The complexity was compounded by the extreme situation due to COVID-19 (part of the working time the person worked physically in Lithuania, and part – remotely in the USA).
After analyzing the situation, it was possible to establish that the Lithuanian employer was unreasonably overtaxing wages – deducting too many social insurance and compulsory health insurance contributions (“Sodra”) and, in some cases, too much personal income tax (PIT). Due to incorrect taxation, a Lithuanian living in the USA received significantly less salary after deducting taxes, and in some months the income lost due to incorrect taxation amounted to thousands. We are happy to have helped the employer understand the tax obligations, correct the tax errors and pay the missing part of the salary to our client.