Value Added Tax (VAT) in Lithuania
The VAT is paid into the State budget by every taxpayer, who is registered (or who has to be registered according to Value Added Tax Law) in the State Taxes Inspection Value added tax register and who performs taxable transactions, which inland are applied with the tax.
1) Transactions imposable with VAT are inland transactions, performed within the framework of the following economic activities:
- delivery of goods for remuneration;
- provision of services for remuneration;
- the goods and/or services are supplied by a taxable person in the performance of his/its economic activities, i.e. acting as such;
2) Any import of goods is imposed with VAT. Regarding exceptions please contact Gencs Valters Law firm.
3) Acquisitions of new means of transport effected by any person within the territory of European Union;
4) Acquisition of goods for which excise duties become chargeable under the Law of the Republic of Lithuania on Excise Duties by any person except for a natural person who is not a taxable person within the territory of European Union.
The taxpayer shall be taken to mean a taxable person identified for the purposes of value added tax by the tax administrator, including any other identification for value added tax purposes, provided the person has been issued with an appropriate identification number, except for the identification of persons for flat-rate VAT scheme purposes. Taxpayers are classified:
- Domestic tax payers – (registered taxpayers - who are registered in the State taxes Inspection in the Value added tax register; non-registered taxpayers - who are not registered in the State Taxes Inspection Value added tax register);
- Taxpayers of other Member States (registered/ non-registered);
- A third country or third territory taxpayers (registered/ non-registered);
For detailed information, please contact Gencs Valters Law firm.
Tax rates in Lithuania
- The standard rate 21%;
- The reduced tax rate of 9%;
- The reduced tax rate of 5%;
- Tax rate of 0%.
The reduced 5% tax rate applies to: medical products and medical purposes products subject to compensation from the state medical insurance budget; equipment for technical assistance of disabled persons and repairing of such equipment.
The reduced 9% tax rate applies to: or heating and hot water supplies to living premises (till 1st Jul 2015; for supply of books and printed non-periodical materials, as well as journals and magazines (except the ones of erotic, violent, unethical material or more than 4/5 of advertising material, promotional publications); for passenger transport services on regular routes listed by the state bodies, including passengers’ luggage transport on such routes; for hotel and accommodation services (rendered under laws regulating tourism).
Tax rate of 0% applies to: goods exported from EU, transport and other services directly related to export of such goods; goods transported or dispatched within EU (assuming “reverse charge” in another Member State); transport of goods imported to EU and other services related to import of such goods; insurance and other financial services related to import of such goods, insurance and financial services directly related to export of goods; goods placed under temporary storage; goods supplied to free economic zones; goods placed for temporary import under relief from customs duties, processing under customs control, etc.
The taxpayer, prior to the performance of taxable transactions or receiving services, shall register in the State Taxes Inspection Value added tax register. In the State Taxes Inspection Value added tax register shall be registered:
- Residents (individuals and legal entities) must register as VAT payers if their turnover form economic activity through a period of 12 successive months exceeds EUR 45.000. For voluntary registration no threshold is required.
- Non-residents must apply for registration from the commencement of activities in Lithuania – no turnover limit shall be applicable to them. No VAT registration is required when reverse-charge VAT is applicable.
- Farmers subject to compensatory VAT rate, taxable persons performing VAT-exempt activities, Lithuanian non-taxable legal persons (for example, state bodies) must register as VAT payers when value of goods purchased from other EU state during the current or previous calendar year exceeded EUR 10.000.
Taxpayers are registered in the VAT register according to the registration request submitted to the State Taxes Inspection.
The State Taxes Inspection within 5 working days after receipt of the registration request shall decide on the taxpayer registration in the Value added tax register or decision to refuse registration.
- 1 month – if annual income of VAT payer exceeds EUR 58.000.
- Half of the calendar year - if annual turnover of VAT payer does not exceed EUR 58.000, the payer may ask the State Taxes Inspection to change the taxable period into the half of the calendar year periods.
Monthly VAT declarations must be filled and VAT must be paid by the 25th day of the following month. Advance VAT must be paid by VAT payers whose average monthly VAT liability exceeds EUR 2.900.000 in 3 consecutive months. State Taxes Inspection has determined the form of the VAT declarations and filing instructions. The following data shall be submitted on VAT declaration:
- Transactions of supply of goods and services (taxable value of: transactions subject to VAT; transactions subject to VAT when VAT is calculated by the buyer; VAT exempt transactions; consumption for personal needs; production of long-term material assets; equity of transactions with special taxation scheme; export of goods (0%); goods supplied to VAT payers within EU (0%); other transactions subject to VAT (0%); transactions outside Lithuania (not subject to VAT in Lithuania));
- Transactions of acquisition of goods and services (taxable value of: goods acquired from EU; services received from EU (indicating the part received from EU VAT payers);
- Output and input VAT;
- Deductable VAT (percentage);
- Output VAT, deductable VAT, payable (reimbursed) VAT: output VAT of 21%, 9%, 5 % rate; when VAT shall be withheld and paid by the buyer; output VAT for goods acquired from EU; deductable VAT.
Taxation treaties ratified by 55 countries are in force in the Republic of Lithuania.