#WallessTaxCookies | Who keeps the tip – and does the taxman take a bite?

Across the Baltic states – Estonia, Latvia and Lithuania – the tax treatment of tips follows a broadly aligned logic.
• Tips pooled by the employer: treated as salary. PIT withheld and social contributions paid by the employer. The company’s income subject to VAT.
• Tips paid via a third-party app, without employer involvement: treated as other income. In Latvia and Lithuania, PIT is withheld at source by the intermediary. In Estonia, no intermediary withholding obligation applies – the recipient declares and pays PIT personally. No social contributions. No VAT.
• Tips given directly to the waiter: PIT applies, declared and paid by the waiter via the annual tax return.

Note: The Estonian and Lithuanian positions are based on commentary by a tax authority representative in the press – no official guidelines have been issued yet.

Questions? Our tax teams across the Baltics are here to help.

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