Sole proprietorship (IĮ) taxes
A sole proprietorship (IĮ) is a legal entity and is not the same as self-employment under an individual activity certificate. Its profits are subject to corporate income tax; the owner's income is taxed according to its legal nature.
| Owner's income | PIT | VSD and PSD |
|---|---|---|
| Personal-needs payments, code 02 | 20 / 25 / 32%; annual tax-free allowance may apply | VSD 13.83% and PSD 6.98%; VSD 16.83% with additional pension saving |
| Distributed profit, code 27 | 15%, irrespective of amount | Not charged on the profit distribution |
For 2026, the code-02 contribution base changed from 50% in the first half of the year to 90% from July. Code-27 income is not included in the total for the 20 / 25 / 32% progressive brackets. [S9, S10]
When choosing a legal form, consider the owner's unlimited civil liability. Similar tax treatment to an MB does not eliminate differences in legal risk. The MB-member service-contract model cannot automatically be applied to an IĮ owner.
Information prepared on 14 October 2026. General guidance, not individual tax advice. Verify eligibility and rates for each case.