Registration of VAT payers in Lithuania
If a company intends to pursue economic activity, it may voluntarily get registered as a Value Added Tax (VAT) payer. However, it should be considered whether the registration is really necessary unless it is compulsory. One of the main criteria is customers purchasing goods or services of the company - if the customers are not VAT payers, voluntary registration would not be necessary.
The standard VAT rate imposed on goods and services is 19 %, while the reduced rate is 9 % and 5 %; in certain cases also VAT relief can be granted.
The VAT payer registration usually takes approximately 10 business days. In order to be registered as a VAT payer, the following information must be submitted:
- registration certificate of the company
- information on objects of the economic activity, as well as related addresses, telephone numbers, fax numbers, e-mails, websites etc.
- information on planned and performed activities according to the Statistical Classification of Economic Activities
- information on methods of conducting business
- information on persons managing the company as well as on other entities managed by such persons
- information on real estate or other long-term assets at disposal of the company that may be used for business in future
Compulsory registration as a VAT payer
A company is obliged to register as a VAT payer in the Republic of Lithuania in the following cases:
- If the revenue from selling goods and providing services in the Republic of Lithuania exceeds 30,000 EUR during the previous 12 months
- If the VAT payer in Lithuania purchases goods from other EU Member States (except for new vehicles or excise goods) the value of which 10,000 EUR in a calendar year
- If a person manages several legal entities and the total annual income of those (during the last 12 months) exceeds 30,000 EUR. The obligation to register as a VAT payer applies to all of these entities even if the income in each of these entities does not exceed 30,000 EUR
Compulsory registration of foreigners as VAT payers
Registration is compulsory for foreigners commencing economic activities in Lithuania (they must register upon the start date of their economic activities, i.e., not considering the 30,000 EUR threshold).
Registration is compulsory for persons from the EU Member States engaging in distance sales to persons in Lithuania, as well as in cases where the value of supplied goods exceeds 40,000 EUR in a calendar year.
There are rules regulating reporting requirements of Lithuanian transactions for VAT purposes. They include the requirements for invoices, timeliness for an invoice, invoice and credit corrections, foreign currency reporting, exchange rate sources, correction of previously submitted returns and accounting records that must be maintained for VAT purposes.
The VAT taxation period is one calendar month. Annual VAT returns must be filed by 1 October of the following year.
Tax authorities may grant a right to have a semi annual tax period if all the income of the VAT payer from the economic activities during the preceding calendar year does not exceed EUR 58,000.
Quarterly VAT returns are filed by VAT payers that supply services by electronic means and thus are subjected to special taxation rules.
Annual VAT returns are filed after the end of the calendar year and adjustments have to be made, if necessary. If there are errors, they have to be fixed in input VAT related to actual data on VAT exempt and taxable turnover. It all has to be made in annual VAT returns.
Depending on the tax period, VAT returns have different filing deadlines:
- When the tax period is a calendar month, VAT returns must be filed by the 25th day of the next month
- When the tax period is a calendar half year, VAT returns must be filed by the 25th day of the first month following that period
- When the tax period is a calendar quarter, VAT returns must be filed by the 20th day of the first month following that period