Updated 11.06.2026
Upon liquidation of a company (UAB, IĮ, MB), the remaining assets are transferred to its shareholder. Upon the transfer of the assets of the company in liquidation, tax liabilities may arise for the company in liquidation and / or its shareholder.
When the assets of a company in liquidation are transferred to its shareholder, the transferred assets are subject to income tax of 7% or 17% tax rate.*
Not the entire value of assets transferred to a shareholder is taxed, but only the difference between the fair market price of that asset at the date of transfer and its acquisition price.
If an asset that has been subject to depreciation or amortization is transferred, the acquisition price of the asset is reduced by the amount of the depreciation or amortization.
For example: Company X is in liquidation. The purchase price of her car, which is handed over to the shareholder, is EUR 35,000. Prior to the liquidation of company X, a depreciation amount of EUR 25,000 was calculated. At the date of the transfer, the real market price of the car is EUR 15,000. Consequently, the increase in the value of the assets of company X in liquidation amounts to EUR 5,000 (15,000 – (35,000 – 25,000). Income tax will be payable on this amount.
When the shareholder is a legal entity, the transferred assets are subject to income tax of 7% or 17% tax rate.*
Where the shareholder is an individual, the distribution is treated as a disposal of shares in the liquidated company. If the shareholder acquired the shares more than five years ago, the assets distributed are subject to a 15% personal income tax (PIT) rate. If the shares were acquired within the last five years, the distributed assets are taxed at the following progressive PIT rates:
Not the entire value of assets received by the shareholder is taxed, but only the income from the increase in the value of the assets, i. y. the difference between the fair market price of the received assets on the date of transfer and the acquisition price of the shares held by the shareholder of the company.
For example: a shareholder of UAB X owns shares of UAB X purchased for EUR 5,000. UAB X is being liquidated and its car is being handed over to the shareholder. At the date of the transfer, the real market price of the car was EUR 15,000. Consequently, the increase in the value of the assets received by the shareholder is EUR 10,000 (15,000 – 5,000). From this amount, the shareholder will pay income or personal income tax.
* A 7% corporate income tax rate may be applied by companies whose revenue for the tax period does not exceed EUR 300,000, subject to certain additional conditions.
The company in liquidation must reimburse the VAT on the purchase of the transferred assets, which has been included in the VAT deduction. Refundable VAT is calculated on the basis of the amount of depreciation or amortization of the asset.
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