Zero-VAT measure until April 2025
Lithuania is progressing a Bill to reclassify the supply of residential fuel and hot water from the 9% reduced rate to zero.
The measure, not in Parliament, would come into effect between 1 November 2024 and 30 April 2025.
Economist are forecasting that average annual inflation this year will be lower than estimated, but prices will jump more sharply next year.
A number of EU countries are cutting fuel and basics VAT to help households deal with record inflation rates this winter.
Lithuania VAT country guide
| Highlights | Local term | Pridetines vertes mokestis (PVM) |
| VAT Rates - standard | 21% | |
| Rates news | Temporary VAT cuts to hotels, catering and fuel | |
| VAT Rates - reduced | 9%; 5; 0% | |
| VAT number format | LT 123456789012 or LT 123456789 | |
| Registration threshold | €45,000. Nil for non-residents; €10,000 for pan-EU digital services and goods OSS return. Intra-community acquisitions €14,000. | |
| VAT Group | Not available | |
| VAT recovery foreign businesses | Permitted | |
| Fiscal Representative | Required for non-EU businesses unless mutual assistance agreement | |
| Currency | Euro €, January 2015 | |
| Administration | Introduction | Lithuania introduced VAT in July 2002. It joined the European Union in 2004. |
| VAT laws | Lithuanian VAT Act 2002. Also EU VAT Directive which takes supremacy as part of EU membership | |
| Tax Authorities | State Tax Inspectorate, part of the Ministry of Finance | |
| VAT Rates | Standard rate | 21% |
| Rates news | Temporary VAT cuts to hotels, catering and fuel | |
| Reduced rates | 9%: residential energy; books and e-books; internal passenger transport; hotel and accommodation services. 5%: medicines; pharmaceuticals; journals and newspapers (including digital); fruits, berries and vegatables | |
| Zero-rated | Intra-community passenger travel by air and sea; Exports and intra-community supplies of goods; gold to central banks; services related to vessels and aircraft | |
| Exempt | Education; financial services; health, hospital, and social welfare; public postal; letting immovable property; betting and gambling; welfare services; international passenger transport; certain copyrights | |
| Scope of VAT | Scope of VAT | Provision of domestic taxable goods and services; EU imports; intra-community acquisitions; Distance selling of goods B2C (OSS or IOSS); receipt of services or goods via the reverse charge |
| Time of supply | Goods & Services (general rule) | Services when provided; goods at time of delivery (start of transport if supplier responsible). Prepayments and advances at the time of payment. |
| Reverse Charge | Soonest of: invoice; taxable supply; or payment | |
| Continuous Services | At earliest of invoice issue date or payment. | |
| Imports | At point of clearance into Lithuania after customs or exit from bonded warehouse. Postponed VAT accounting permitted (see separate) | |
| Goods on approval and return | General rule - when customer receives the goods | |
| Registration | VAT registration threshold | €45,000. Nil for non-residents; €10,000 for pan-EU digital services and goods OSS return. Intra-community acquisitions €14,000. |
| Voluntary VAT registration | Permitted except for non-residents who face no registration threshold if providing a taxable activity | |
| VAT number format | LT 123456789012 or LT 123456789 | |
| VAT Group | Not available | |
| Non-residents | Permitted, no additional requirements. No registration threshold. Fiscal Representative required for most non-EU businesses. | |
| Fiscal Representative | Required for non-EU businesses unless mutual assistance agreement (eg Norway and the UK). The Fiscal Representative must be a resident. They are jointly and severally liable for their client's VAT | |
| Digital Services | Lithuania participates in the EU single One Stop Shop (OSS) VAT return for digital, telecoms and broadcast services. This was formerly the MOSS regime until 30 June 2021 | |
| Pre VAT registration costs | Permitted on goods or services that can be shown to be related to the establishment of the taxable supply pre registration | |
| VAT Invoices | Issuance | Should be issued immediately at the time of supply. For continuous services or zero-rated supplies - monthly by the 10th of the month following the month of supply. Not required for sales via VAT cash registers (see separate); OSS goods and services; some financial services |
| Content | Date; unique sequential invoice number; name and address of supplier and customer; Customer VAT number for intra-community supplies or reverse charge; date of supply or advance payment if different from invoice date; Description, quantity or units etc of supply of goods or services; price per unit; taxable amount; VAT charged; rate (broken out if supplies at different rates); total; explanation if zero-rated supply. | |
| E-invoices | Mandatory e-invoicing under consideration | |
| Simplified invoices | Permitted for invoices not exceeding €100. Not to be used for intra-community supplies. | |
| Self-billing | Permitted by written or verbal agreement between both parties | |
| Retention of invoices | Ten years. Paper invoices may not be digitised. Resident business must retain records in-country - although electronic records may be stored outside of the country with ready access for the tax office. | |
| FX rules | Invoices may be issued in foreign currencies, but the VAT payable should be shown in €. The exchange rate at the time of supply should be based on the Lithuanian Central Bank or the ECB | |
| Invoice corrections | Credit notes may be used to adjust VAT amount, but must include invoice number of original invoice and explanation for change. | |
| Compliance | Right to deduct | Excluded: business entertainment unless does not exceed 2% of annual revenues in which case 50% only deductible; passenger transport (excluding public transport); passenger vehicles and running costs for less than 8 passengers |
| Call-off stock | Following the EU's 2020 Quick Fix harmonisation reforms, stock may be transferred from an EU state to an customer location/warehouse in Lithuania without triggering a VAT registration and supply for a non-Lithuanian supplier. Title has not passed until the customer takes the goods for production and sale. At which time a zero-rated transaction may be effected. This must happen within 12 months of the original movement | |
| Reverse Charge - B2B | Aside from reverse charge on cross-border B2B sales, it is also applied: non-residents not VAT registered supplying goods locally, including natural gas and electricity. Domestic reverse charge applies: various metals; scrap; construction; timber; mobile phones tablets, laptops and hard drives; | |
| Cash discounts | If a cash discount is taken-up after a sale in a different VAT reporting period, the VAT is adjusted via a credit note | |
| Bad debt relief | Provided: over twelve month overdue; bankruptcy / insolvency; other reliable documentation proving non-payment. | |
| Import VAT deferment | Permitted without special application or licence for declaring (and not paying) import VAT in the next VAT return. Requires AEO certification. Possible for non-VAT registered businesses to import and use bank guarantee to avoid payment. Exemption is allowed in the case of an import and immediate (30 days) intra-community supply. | |
| VAT warehouse | Permitted only for limited cases e.g. airport and seaport non-EU traveller shopping. Bonded warehouses also in operation. | |
| Supply & install | Non-residents providing an instal service with goods should use the reverse charge and are not required to VAT register | |
| Use and enjoyment services | Applied for non-EU supplies on supplies to non-taxable persons: software development; lease of vehicles; goods transportation; telecoms, broadcast and electronic services | |
| Capital goods adjustment period | Movable property: four years. Immovable property: ten years | |
| Non-residents VAT recovery | EU businesses may apply for Lithuanian VAT reclaims through the electronic portal of the tax authorities of their company of residency (8th Directive). Quarterly claims above €400 permitted, with final claim above €50 by 30 Sept of following year. Non-EU businesses must submit a paper claim with supporting invoices via the Lithuanian authorities directly (13th Directive). For non-EU businesses, Lithuania does require a reciprocal agreement with the country of residence of the claimant - which includes Norway, Switzerland, Canada and the UK (subject to Brexit confirmation). Also includes US under special arrangements. Non-EU businesses do not have to appoint an Lithuanian resident Fiscal Representative for the reclaim process. | |
| VAT on Digital Services | Lithuania follows the EU VAT on digital services regime, introduced in 2015. This includes participation in the One-Stop-Shop (OSS) single EU VAT return (formerly MOSS until 30 June 2021) | |
| Live events | ||
| Distance selling threshold for goods | Nil. Following the EU ecommerce VAT package reforms from 1 July 2021, local Lithuania VAT must be charged on all sales by non-Lithuania EU e-commerce sellers shipping from within the EU. Imported distance sales not exceeding €150 liable to Lithuania sales VAT with IOSS return option | |
| Cash accounting scheme | Not available | |
| VAT registered cash tills | Not required | |
| Statute of limitations | Five years | |
| Other | N/a | |
| VAT Returns | Frequency | Monthly. Quarterly option if sales did not exceed €300,000. Bi-annual option if annual calendar sales do not exceed €60,000. |
| Filing method | Electronic | |
| Deadlines (inc payments) | 25th of the month following the reporting period. | |
| VAT credits | Excess input VAT may be carried over to the next VAT return. A refund claim may be made with supporting evidence | |
| Corrections | Corrective VAT return. Tax overpayments may be done via credit note and the next VAT return | |
| Non-residents | Permitted with no differences. However, non-EU businesses will require a Fiscal Representative if not mutual assistance agreements (includes Norway and the UK (subject to post-Brexit confirmation)) | |
| Other filings | Monthly European Sales Listing for goods and services supplies 25th of month following. Intrastat monthly by the 10th of the following month for supply of goods above threshold: dispatches: €400k; arrivals: €550k. 'i.SAF' was introduced in 2016 for all VAT registered taxpayers for electronic listing of purchase and sale invoices each month by the 20th of the month following the VAT reporting period. | |
| SAF-T | Lithuania SAF-T obligations | |
| Penalties & interest | €200 to €390 fine for missed return. Daily interest penalty of 0.03% for unpaid declared VAT due. Penalty of 10% to 50% on VAT not properly reported. | |
| B2C Distance Selling returns | Lithuania participates in the One-Stop-Shop OSS pan-EU VAT return for distance selling, introduced in July 2021. |
