The main labour law in Lithuania is the Labour Code of the Republic of Lithuania that entered into force on 1 July 2017. This Code replaced the previous one that was in force from 2002 to 2017. The Labour Code regulates the individual employment relations that arise upon concluding an employment contract in accordance with the procedure established by the Code. The Code shall also regulate social relations related to individual employment relations (relations prior to conclusion and after termination of an employment contract, collective labour relations, relations which arise in settling disputes between participants in labour relations, relations related to observation and supervision of the law, etc.).
Many artists in Lithuania are self-employed. There are two types of self–employment: with a business certificate or a certificate of self-employment. The rules of these activities and their taxes are set up by the Republic of Lithuania Law on Personal Income Tax (2002).
A business certificate is a document certifying that a person has paid a fixed fee for a business certificate and has the right to perform the activities indicated in the business certificate for a certain period of time. Business certificates are issued only for certain types of activities. By acquiring a business certificate an advance payment of a fixed income tax is required.
A self-employment certificate is a document certifying that a person has registered his activities at the local State Tax Inspectorate and is entitled to perform the activities indicated in the certificate. When independent activities are performed under a self-employment certificate, the income tax is paid from the actual annual income from individual activities. When calculating the taxable income from the earned revenues, it is possible to deduct allowable deductions (costs incurred for earning revenues). When a simplified procedure is applied, a fixed amount can be considered as allowable deductions, for example 30% from all the revenues gained from independent activities. At the end of the year, persons declare their revenues and pay the established taxes. A person performing individual activities under a self-employment certificate must fill in the Income and Expenditure Accounting Register and issue one of the accounting documents: a receipt for the goods (services) bought or sold, an invoice, a VAT invoice, or a cash register receipt. Detailed information is specified in the Rules of Accounting of Residents’ Individual Activities (except for residents holding business certificates).