This article analyzes the effect of Lithuanian tax system on profitability of companies. All taxes are strictly defined by specific laws and the size of taxes depends on companies’ sales turnover. In the process of research, first of all, the burden of all taxes was calculated and, later, the burden of taxes for specific area was calculated. The research was based on change of income tax legislative base. The author aimed to establish average income tax rate and gauge its influence on income tax burden (calculated by gross and net profit).The results of the research indicated that there is a close correlation between factual income tax rate and income tax burden calculated by net profit
