VAT, GST and Sales Tax in Lithuania

Summary

 Name of Tax Value-added tax (VAT)
Local name Pridetines vertes mokestis
Date introduced 1-May-94
Trading bloc membership European Union Member State
Administered by Ministry of Finance (http://finmin.lrv.lt) State Tax Inspectorate (http://www.vmi.lt) Customs Department (http://www.cust.lt)
VAT rates
Standard 21%
Reduced 5%, 9%
Other Zero-rated and exempt
VAT number format LT123456789, LT123456789012
VAT return periods
Monthly General return period
Semiannually For natural persons; optional for legal persons with turnover not exceeding EUR60,000 in the preceding year
Quarterly For non-EU persons that supply electronic services to nontaxable persons
Other For members of international groups (period may not be longer than 60 days, and the entity’s fiscal year must be the calendar year)
Thresholds Registration
Businesses established in Lithuania Revenue of EUR45,000 in the preceding 12 months
Businesses established elsewhere First taxable supply (unless the reverse charge applies)
Distance selling EUR35,000 in the current or previous year
Recovery of VAT by non-established businesses Yes

Scope of the tax

VAT applies to the following transactions:

  • The supply of goods or services in Lithuania made for consid­eration by a taxable person performing economic activities
  • The intra-Community acquisition of goods from another Member State (see the chapter on the EU)
  • The importation of goods into Lithuania (subject to import VAT)
  • Certain other cases linked to the international traffic of goods (for example, the supply of goods that are intended to be pro­duced to customs and placed in temporary storage, the supply of goods that are intended to be placed in a free zone and the supply of goods that are intended to be placed under customs warehousing arrangements or special inward processing proce­dure).

Who is liable

Persons liable to VAT are:

  • A taxable person, i.e., a business entity, an individual estab­lished in Lithuania or elsewhere or a collective-investment undertaking (fund) that performs an economic activity in the course of its business in Lithuania
  • A legal entity that is not a taxable person with respect to intra­EU acquisitions of goods or any person with respect to the intra-Community acquisition of new means of transport

The VAT registration threshold for Lithuanian entities is turnover in excess of EUR45,000 in the preceding 12 months. If the total turnover of all entities controlled by a single entity or by an indi­vidual exceeds EUR45,000, all entities are required to register for VAT, even if the turnover of each entity separately does not exceed the threshold.

The VAT registration threshold for Lithuanian and foreign enti­ties is the amount of intra-EU acquisitions of goods exceeding EUR14,000 in the preceding 12 months.

Special rules apply to foreign or “non-established” businesses that have no fixed establishment in Lithuania.

Voluntary registration. Certain persons may register for VAT vol­untarily. This possibility exists for 1) a business established in Lithuania that has turnover not exceeding the registration thresh­old (except when it is carrying out or intends to carry out only an activity for which input and/or import VAT on goods and/or ser­vices used could not be deductible under the provisions of Lithuanian VAT law) and 2) a person that acquires or plans to acquire goods from another EU Member State (except new means of transport or excise goods). In practice, persons estab­lished outside Lithuania may also voluntarily register for VAT.

Group registration. VAT group registration is not allowed under Lithuanian VAT law. Entities that are legally related must register for VAT individually.

Registration procedures. Applications for registration as a Lithuanian taxpayer and as a VAT payer can be filed electroni­cally (recommended) or manually through the system Mano VMI. Registration as a Lithuanian taxpayer takes up to five working days, and registration as a Lithuanian VAT payer takes up to three working days.

A nonresident business that carries out taxable supplies of goods (services) in the territory of Lithuania must register for VAT through its fixed establishment in Lithuania or it must appoint a fiscal representative (also referred to as a tax representative). The requirement to appoint a fiscal representative is not applicable to nonresident businesses that are based in other EU Member States. The requirement to appoint the fiscal representative is also not applicable to non-EU established businesses that are based in the territories where the provisions of Mutual assistance agreements are applied, which essentially are equivalent to the provisions of Directive No 2010/24/EU and Regulation No. 904/2010.

Late-registration penalties. Penalties and interest are not assessed for late registration or failure to register for VAT. However, if a business does not register for VAT, it still must calculate and pay VAT. Failure to comply with this obligation may result in penal­ties and interest.

Non-established businesses and tax representatives. A “non-established business” is a business that does not have a fixed establishment in Lithuania. A non-established business must register for VAT in Lithuania if it makes taxable supplies of goods or services there. No VAT registration threshold applies to supplies made by foreign non-established businesses; that is, registration is required in the event a taxable supply is made in Lithuania, unless the reverse charge applies or unless the supply is outside the scope of VAT or is exempt. A non-established busi­ness must register for VAT through a fixed establishment in Lithuania or appoint a fiscal representative (tax representative – see Registration procedures).

An EU taxable person must register for VAT if it makes distance sales of goods to customers in Lithuania in excess of EUR35,000 in the current or previous year.

Foreign entities are not required to register for VAT if their trans­actions are exempt, outside the scope of VAT or zero-rated (tax­able at 0%). However, for certain supplies, VAT registration is required even though the zero rate of VAT applies. These supplies include the following:

  • Exports of goods
  • Supplies of goods that are intended to be produced to customs and placed in temporary storage
  • Supplies of goods that are intended to be placed in a free zone or in a free warehouse
  • Supplies of goods that are intended to be placed under customs warehousing arrangements or special inward processing proce­dure
  • Services linked to the above supplies
  • Supplies of goods to another EU Member State that are trans­ported to that country
  • Supplies of new vehicles that are transported to another EU Member State

Taxable persons established outside the EU that supply electronic services and taxable persons that supply electronic services through a fixed establishment outside the EU to nontaxable per­sons established in Lithuania must register for VAT (that is, if the service provider is not yet registered in another EU Member State).

Reverse charge. A non-established business that makes taxable supplies in Lithuania is not required to register for VAT if the reverse-charge rule applies to all its transactions. Under the reverse-charge rule, a Lithuanian customer that is a taxable person estab­lished in Lithuania is responsible for the calculation and payment of VAT, unless either of the following circumstances exists:

  • The supply is used by a fixed establishment of the person out­side Lithuania.
  • The supply falls under the list of exceptions.

Under the reverse-charge rule, a customer that is a VAT-registered person in Lithuania is responsible for the calculation and payment of VAT with respect to supplies of the following:

  • Natural gas and electricity
  • Goods installed and assembled in Lithuania

The Lithuanian VAT law also provides for a reverse-charge pro­cedure with respect to supplies between persons established in Lithuania, including the following:

  • Supplies of goods and services while a supplier is under bank­ruptcy or a restructuring procedure
  • Supplies of metal scrap and similar products
  • Supplies of construction services as detailed in the law on con­struction and supplies of certain construction materials

Digital economy. For rules related to the taxation of digital goods or services, see Special schemes.

Mini One-Stop Shop. Taxable persons supplying telecommunica­tion, broadcasting and electronic services within territory of the EU to nontaxable persons can choose to be registered for VAT purposes in one EU Member State to fulfill their VAT obligations relating to the above services supplied in any EU Member State.

Deregistration. A Lithuanian person who is a VAT payer has the right to deregister on its own initiative if:

  • The VAT payer’s total turnover does not exceed EUR45,000 in the preceding 12 months.
  • The value of intra-EU acquisitions does not exceed EUR14,000 in the preceding 12 months.
  • The VAT payer finishes its activities due to liquidation or reor­ganization.
  • The VAT payer terminates its taxable activities.

A foreign person who is a Lithuanian VAT payer has the right to deregister on its own initiative if:

  • The VAT payer finishes its activities in Lithuania.
  • In the case of distance selling, the value of goods transported in Lithuania does not exceed EUR35,000 in the preceding 12 months.
  • The VAT payer finishes its activities due to liquidation or reor­ganization.

Lithuanian VAT payers may be deregistered on the initiative of the tax administrator as well, if:

  • The VAT payer does not perform economic activities or intra­EU acquisitions (e.g., the Lithuanian VAT payer does not sub­mit the VAT returns or does not report taxable supplies, intra-EU acquisitions for two months in a row. (The tax admin­istrator observes these indicators quite strictly.)
  • The VAT payer finishes its activities due to liquidation or reor­ganization.
  • The VAT payer (natural person) is dead.

VAT rates

The term “taxable supplies” refers to supplies of goods and ser­vices that are liable to a rate of VAT.

The standard rate of VAT applies to all supplies of goods or ser­vices, unless a specific measure provides a reduced rate, the zero rate or an exemption.

The VAT rates are as follows:

  • Standard rate: 21%
  • Reduced rates: 9% and 5%
  • Zero rate (0%)

Examples of supplies of goods and services taxable at 9%

  • Supply of books and printed non-periodical materials such as encyclopedias, dictionaries, children books and maps
  • Heating and hot water supplies to residential premises
  • Newspapers, magazines and other periodicals, with the excep­tion of those with erotic or violent content or those that do not comply with professional ethics publications, as well as printed productions in which more than 4/5 of the content is paid adver­tising
  • Passengers and their baggage transport services going on regu­lar routes that are authorized by the Ministry of Transportation or the local authorities
  • For accommodation services supplied according to the legisla­tion regulating tourism activities

Examples of supplies of goods and services taxable at 5%

  • Medical products and medical purposes products, subject to full or partial compensation from the state medical insurance budget
  • Technical equipment that is used to assist persons with dis­abilities as well as for the repair services of such equipment

Examples of supplies of goods and services taxable at 0%

  • Exports of goods from the EU and related services
  • International transport and related services
  • Supplies related to ships and aircraft
  • Intra-Community supplies of goods
  • Work on movable tangible property (certain cases)
  • Intermediary services for the above supplies

The term “exempt supplies” refers to supplies of goods and ser­vices that are not liable to tax and that do not give rise to a right of input tax deduction (see Section F). Goods and services that are outside the scope of VAT do not result in tax deductions.

Examples of exempt supplies

  • Health care services and goods
  • Real estate rent and disposals
  • Insurance and reinsurance
  • Certain financial services
  • Cultural and sporting activities
  • Educational services
  • Betting and gaming services
  • Universal post services
  • Social and related services
  • Radio and television services
  • Imported goods (certain cases)

Option to tax for exempt supplies. A VAT payer may opt to charge VAT on the following supplies:

  • Rent of real estate
  • Disposal of real estate
  • Certain financial services

The option is applied only if the above services are supplied to the VAT payer. The tax authorities should be formally notified about the decision. A VAT payer that has opted to charge VAT on any of the above services should charge VAT on all similar trans­actions for a period of not less than 24 months.

Time of supply

The time when VAT becomes due is called the “time of supply” or “tax point.” The basic time of supply for goods and services is when the VAT invoice is issued. If an invoice is not issued, the time of supply is when the earlier of the following events occurs:

  • Goods or services are supplied.
  • Payment for goods or services is received.

A range of other situations have different time of supply rules. Some of these situations are described below.

Intra-Community acquisitions. The time of supply for the goods acquired from another EU Member State is the date on which the supplier issues an invoice, but not later than the 15th day of the month following the month during which the transport of goods began.

Prepayments. The time of supply for a prepayment received before the supply is made is when the prepayment or the total payment is received. This rule applies to contracts that provide for a supply after 12 months. If the prepayment is received and if the supply will be triggered earlier than 12 months beginning on the date of the signing of the contract, the taxable person may choose the date of receipt of prepayment as the time of supply and calculate the VAT on this prepayment.

If the invoice is issued upon the receipt of prepayment, the remu­neration indicated in the final invoice shall be reduced by the amount of prepayment. If special margin schemes for travel agents and for secondhand goods, works of art, collectors’ items and antiques are applied, the above treatment of prepayments does not apply.

Construction work. The time of supply for the self-construction of a building is the moment when the building begins to be used in economic activities. For an essential improvement on a building, the time of supply is the moment when the works are finished. The time of supply for construction services is when the invoice for the services is issued. If the invoice for construction services is not issued, the time of supply for the services is when the earli­est of the following events occurs:

  • The services are provided.
  • The consideration is paid for the services provided.

Imported goods. Import VAT shall become chargeable upon the entry of the goods from a third country territory into the territory of Lithuania. Where the goods imported into the territory of Lithuania are subjected to certain actions, procedures or arrange­ments specified in VAT law, import VAT shall become chargeable upon cessation of the application of said actions, procedures or arrangements within the territory of Lithuania.

Postponed accounting. Postponed accounting for imports applies to imports made by taxable persons. The import VAT due is cal­culated by the customs authority, but the VAT is included and recovered on the VAT return in the same taxable period.

Reverse-charge services. The time of supply for reverse-charge services is the date on which the invoice for the services is issued. If an invoice for the services is not issued, the time of supply for the services is when the earliest of the following events occurs:

  • The services are provided.
  • The consideration is paid for the services provided.

Cash accounting. Lithuania has not implemented Article 167a from Directive 2006/112/EC. However, there is a similar option­al regime applicable to agricultural producers. Under this regime, VAT on the supplied agricultural products becomes chargeable upon the payment of the consideration.

Continuous supplies of services. In the case where long-term ser­vices are supplied, i.e., services that are supplied for a certain continuous period such as telecommunications, leases, etc., and also in the case of long-term supply of electricity, gas, heat and other types of energy, VAT shall become chargeable when the VAT invoice for the supply of goods or services during the accounting period is issued. In cases where the VAT invoice is not issued, VAT is chargeable upon receipt of the consideration for the amount of goods or services supplied during the accounting period.

Intra-Community supplies of goods. VAT shall become chargeable for the goods supplied to another Member State when the VAT invoice for the supply of goods is issued, but not later than the 15th day of the month following the month in which the goods were dispatched.

Leased assets. VAT shall become chargeable when the goods are transferred in cases where goods are transferred under a lease contract or other contract that provides for payment on deferred terms or by installments and under the terms of this transaction the major part of risk and benefit relating to the ownership of the goods as well as the ownership of the goods shall pass to the person to whom the goods have been transferred.

Recovery of VAT by taxable persons

A taxable person that is registered for VAT and that performs economic activities may recover input tax, which is VAT charged on goods and services supplied to it for business purposes. A taxable person generally recovers input tax by deducting it from output tax, which is VAT charged on supplies made.

Input tax includes VAT charged on goods and services acquired in Lithuania, VAT paid on imports of goods and VAT self-assessed for reverse-charge services received.

The amount of the VAT reclaimed must be detailed on a valid VAT invoice or on cash receipts (for small amounts of VAT).

Specific rules apply for the recovery of VAT incurred before VAT registration in Lithuania.

Nondeductible input tax. Input tax may not be recovered on pur­chases of goods and services that are not used for business pur­poses (for example, goods acquired for private use by a business), are directly attributable to VAT exempt or out-of-scope activities. In addition, input tax may not be recovered for some items of business expenditure.

The following lists provides some examples of items of expendi­ture for which input tax is not deductible.

Examples of items for which input tax is nondeductible

  • Purchase, lease and hire of cars
  • Business gifts (if amount for “small gift” is exceeded)
  • 25% of VAT for entertainment expenses
  • VAT paid on behalf of a third party
  • Tourism services if a special VAT scheme applies
  • Secondhand and cultural value goods if a special VAT scheme applies

Examples of items for which input tax is deductible
(if related to a taxable business use)

  • Accommodation
  • Advertising
  • Books
  • Conferences
  • Fees from professional advisers such as accountants, lawyers and tax advisers
  • Land and property
  • Lease/purchase of vans and trucks
  • Mobile phones
  • Parking (on and off street)
  • Petrol
  • Petrol and maintenance costs of trucks and vans
  • Subscriptions for periodicals and magazines (related to the business of the company)
  • Telephone/faxes used in the office
  • Travel expenses (air, rail, bus, boat)

Partial deduction. Input tax directly related to making exempt supplies is not generally recoverable. If a taxable person makes both exempt supplies and taxable supplies, it may not deduct input tax in full. This situation is referred to as “partial deduction.”

The amount of input tax that may be deducted is generally calcu­lated using the following two-stage calculation:

  • The first stage identifies the input VAT that may be directly allocated to taxable and to exempt supplies. Input tax directly allocated to taxable supplies is deductible, while input tax directly related to exempt supplies is not deductible.
  • The second stage identifies the amount of the remaining input tax (for example, input tax on general business overhead) that may be allocated to taxable supplies and recovered. The calcu­lation is done using a pro rata method, based on the value of taxable supplies made in the period, compared with the value of total supplies made.

If a taxable person is not able to directly allocate VAT to taxable and exempt supplies, a pro rata calculation may be used for all input tax incurred.

A partially exempt taxable person may provisionally use the recovery percentage calculated for the previous year. If, at the end of the year, the taxable person’s actual recovery percentage differs by more than 5% from the provisional percentage used, an adjustment calculation must be made.

Capital goods. Capital goods are items of capital expenditure that are used in a business more than one year. Input tax is deducted in the VAT year in which the goods are acquired or first taken into use. The amount of input tax recovered depends on the taxable person’s partial deduction recovery position in the VAT year of acquisition or first use. However, the amount of input tax recov­ered for capital goods must be adjusted over time if the taxable person’s partial exemption recovery percentage changes during the adjustment period or if the capital goods are either used for nontaxable supplies or written off. The adjustment may result in either an increase or a decrease of deductible input VAT, depend­ing on whether the taxable person’s recovery percentage increased or decreased in the year, compared with the year in which the capital goods were acquired or first used.

In Lithuania, the capital goods adjustment applies to the follow­ing assets for the number of years indicated:

  • Property immovable by its nature, including improvement of buildings or structures: adjusted for a period of 10 years
  • Other types of tangible capital assets legally required to be depreciated over a period of at least four years for purposes of the taxes on profit or income: adjusted for a period of five years

The adjustment is applied each year following the year of acqui­sition, to a fraction of the total input tax (1/10 for immovable property and 1/5 for other tangible capital goods).

Refunds. If the amount of input tax that is deductible for a VAT period exceeds the amount of output tax that is chargeable in the same period, the taxable person has a VAT credit. The credit must first be used to offset other taxes payable. If the amount of VAT credit exceeds all taxes payable, the excess is refunded either on a monthly or semiannual basis.

Bad debts. Suppliers may be able to reduce the calculated payable VAT with the output VAT amount attributable to bad debts (not applicable to margin schemes and when the supplier of goods or provider of services is a related person). As indicated in VAT law, a receivable remuneration is considered as a bad debt (including output VAT), if the person cannot recover such remuneration for at least 12 calendar months from the taxation moment of the sup­plied goods or provided services and if the output VAT amount was calculated and declared.

Preregistration costs. Input VAT may be subject to VAT recovery in those cases where VAT was paid on goods or services acquired before an entity was registered as VAT payer. Special rules and procedures apply.

Noneconomic activities. The following activities are considered as noneconomic activities:

  • Employment (under employment contract)
  • Activities of state and local government authorities (with exceptions)

Recovery of VAT by non-established businesses

Lithuania refunds VAT incurred by businesses that are neither established nor registered for VAT in Lithuania. Non-established businesses may claim Lithuanian VAT to the same extent as VAT-registered businesses.

For businesses established in the EU, refund is made under the terms of the EU Directive 2008/9/EC. For businesses established outside the EU, refund is made under the terms of the EU 13th Directive. The refund scheme for non-EU countries applies in accordance with the reciprocity principle and is currently in place with Armenia, Iceland, Norway, Canada, Switzerland and Turkey.

To claim a refund, a non-established business must satisfy both of the following conditions:

  • It must not have a business establishment in Lithuania through which activities are performed (or if the claimant is an indi­vidual, he or she must not be a permanent resident in Lithuania).
  • It must not make taxable supplies of goods or services in Lithuania.

However, if the claimant supplies international transport services or sells goods that are taxed through the application of the reverse-charge mechanism, it may still apply for a VAT refund.

For the general VAT refund rules in the EU Directive 2008/9/EC and the EU 13th Directive refund schemes, see the chapter on the EU.

Refund application. The deadline for refund claims is 30 September of the year following the year when the input tax was incurred. The minimum claim period is three months, while the maximum period is one year. The minimum claim for a period of less than a year is EUR400. For an annual claim, the minimum amount is EUR49.

A taxable person that is not established in Lithuania (that is, registered in another EU Member State for VAT purposes) sub­mits the VAT refund applications to the electronic VAT refund system through the home country tax authorities.

Invoicing

VAT invoices and credit notes. A Lithuanian taxable person must generally provide a VAT invoice for all taxable supplies made and for exports. A VAT invoice is necessary to support a claim for input tax deduction.

A VAT credit note may be used to reduce VAT charged and reclaimed on a supply if the taxable value changes (for example, if the customer returns the goods or the supplier grants a discount) or if the VAT rate changes.

Electronic invoicing. In line with EU Directive 2010/45/EU, elec­tronic invoices that are received in electronic means are accept­able for the deduction of input VAT, even without an electronic signature. The authenticity of the original electronic invoice, the integrity of content and legibility must be ensured from the time of issue until the end of the 10-year archiving period. Businesses can decide individually how to ensure the authenticity of the original invoice, the integrity of content and legibility, provided that a reliable audit trail between the invoice and the service is established.

Proof of exports and intra-EU supplies. Supplies of exported goods or the intra-Community supply of goods are zero-rated. However, to qualify as VAT zero-rated, exports and intra-Com­munity supplies must be supported by certain evidences and proofs. Acceptable proof inter alia includes the following docu­mentation:

  • In case of export supplies, a taxpayer should obtain documents substantiating that the goods were exported outside the EU, i.e., transportation documents (e.g., CMR, Air Waybill, Bill of Lading), exportation documents (e.g., export notification form IE559), payment documents, etc. The documents should indi­cate that the transportation was arranged by the supplier or the purchaser or the other person on their behalf.
  • In case of intra-EU supplies, a taxpayer should obtain transpor­tation documents (e.g., CMR, Air Waybill, Bill of Lading) substantiating that the goods were transported outside the terri­tory of Lithuania. The documents should indicate that the transportation was arranged by the supplier or the purchaser or the other person on their behalf. The taxpayer should also hold the proof that the customer had a valid VAT number in another EU Member State at the time of supply of goods.

It should be noted that the transportation documents mentioned above must be filled in as per the rules established.

Invoices issued in a foreign currency. If an invoice is issued in a foreign currency, the VAT amount must be converted to euros and be mentioned in euros on the invoice.

VAT returns and payment

VAT returns. Lithuanian taxable persons must generally file VAT returns monthly. A taxable person whose taxable supplies did not exceed EUR60,000 in the preceding calendar year may choose to file semiannually. Individuals generally file semiannually. How­ever, they may request a different VAT period.

Members of international corporate groups may request to file VAT returns for a different period if the group uses accounting periods other than calendar months. However, the maximum allowable return period is 60 days. In addition, both the begin­ning of the first period and the end of the last period must coin­cide with the calendar year (that is, beginning on 1 January and ending on 31 December each year).

In general, monthly VAT returns must be filed by the 25th day of the month following the end of the tax period (other dates may apply). Payment in full is required on the same date. VAT return liabilities must be paid in euros.

Special schemes. There are special schemes for farmers; travel agencies; investment gold; telecommunications, broadcasting and electronic services; and the sale of second-hand goods such as art, antiques and other collectibles.

Farmers. Farmers can receive six percent compensation from the buyers of their produced agricultural products. The receipt and payment of compensation should be declared to the tax authori­ties accordingly.

Travel agencies. Travel agencies calculate VAT on the margin of the services bought and sold to customers. Travel agencies have no right to deduct input VAT on travel services bought from the third parties. Travel services supplied by travel agencies outside Lithuania are taxed at the zero rate.

Investment gold. The supply of investment gold acquired from another Member State is exempt; agency services for supplies and acquisitions of investment gold are also exempt. However, VAT-registered persons manufacturing investment gold or reworking any gold into investment gold can choose to charge VAT on the supplies they perform. In those cases, agents can also charge VAT for their services outlined above. Persons supplying investment gold that are not registered for VAT can register for VAT and make use of the provision outlined above.

Also, input VAT incurred on acquisitions of investment gold for which the VAT has been chosen to charge in the case outlined above, acquisition or import of any gold to be turned into invest­ment gold, acquisition of gold form, weight and purity changing services can be deducted. Persons manufacturing investment gold or reworking any gold into investment gold can also deduct any input VAT incurred on acquisitions of any services or goods related to the processes named above.

Telecommunications, broadcasting and electronic services. Taxable persons supplying telecommunication, broadcasting and electronic services in the EU to nontaxable persons can choose to be registered for VAT purposes in Lithuania to fulfill their VAT obligations relating to these services supplied in any Member State.

The sale of secondhand goods such as art, antiques and other collectibles. VAT is calculated on the margin of the goods bought and sold, and if this scheme is adopted, the seller has no right to deduct input VAT. However, a seller (VAT payer) has the right to calculate VAT on the total value of goods, in which case the seller has the right to deduct input VAT paid, but not earlier than the date the goods are sold.

Electronic filing and archiving. VAT returns may be filed to the tax authorities both manually or electronically. VAT returns and all other tax returns must be filed electronically by Lithuanian legal entities. Foreign taxable entities are eligible to submit the return either electronically or in paper. For electronic filing, registration in the Electronic Declaration System is required.

The retention period of VAT invoices is 10 years.

VAT ledgers. Taxable persons registered for VAT must submit monthly data on sales and purchases invoices to the Lithuanian tax authorities by electronic means (i.SAF). i.SAF data include detailed information (e.g., general information about the legal person, taxable period, taxable amount, tax point, invoice num­ber, information about suppliers, customers) about all performed and received supplies.

The system is designed to enable the tax authorities to cross­check the transactions reported by suppliers with the transactions reported by customers in order to identify suspicious chain sup­plies and VAT fraud for better VAT collection purposes.

i.SAF data may be submitted electronically as an XML data file in the tax authorities’ integrated tax administration system or i. SAF data may be filed on the website. i.SAF data shall be sub­mitted by the 20th day of the month following the reporting period.

Annual returns. Generally, a taxpayer is obliged to provide an annual VAT return only in cases where its partial exemption recovery percentage has changed or when adjustments in the context of the capital goods scheme are necessary.

Penalties

The penalty assessed for the late payment of VAT ranges from 10% to 50% of the unpaid tax. In addition, late payment interest is calculated from the day following the due date for payment up to the date on which the payment is made. The late payment inter­est rate is 0.03% per day.

EU filings

A taxable person that trades with other EU countries must com­plete statistical reports, known as Intrastat, and EU Sales Lists (ESLs). Penalties may be imposed for late, missing and inaccu­rate Intrastat returns and ESLs.

Taxable persons must begin to report services provided to taxable persons established in other EU countries if these services are subject to VAT in those EU countries.

EU Sales List. No threshold is applied. However, in cases where there are no transactions in a given period that would need to be reported, it is not required to submit a nil EU Sales List. EU Sales Lists can be submitted either manually or by electronic means.

Intrastat. For the year 2017 the thresholds are as follows:

  • If the amount of intra-EU acquisitions within the previous 12 months exceeds EUR280,000, the Intrastat form shall be filed to the Territorial Customs Office.
  • If the amount of intra-EU supplies within the previous 12 months exceeds EUR170,000 the Intrastat form shall be filed to the Territorial Customs Office.

Also, additional statistical information needs to be provided in the Intrastat declaration (box 13) if the value of intra-EU supplies exceeds EUR6 million or the value of intra-EU acquisitions exceeds EUR3 million.

The deadline for submission of the Intrastat statement is the 10th working day after the end of the calendar month to which it relates.

Intrastat statements may be submitted both electronically and manually.