VAT in Lithuania – a complete guide. Rates and registration thresholds | VAT in Europe #11

The Value Added Tax (VAT) was introduced in Lithuania in 1994, ten years before the country’s accession to the European Union. Key are the EU Directives determining VAT matters. Locally, it is managed by the State Tax Inspectorate (STI), which is directly subordinate to the Ministry of Finance of the Republic of Lithuania.

Should you register for VAT in Lithuania?

Non-resident taxpayers, who provide goods/services within Lithuania (intended for local businesses or consumers), may face the obligation to register their business for VAT purposes in Lithuania.

The obligation to register for VAT in Lithuania exists in, among others, the following cases:

• import of goods from countries outside the EU to Lithuania,
• intra-Community supplies, thus moving goods between Lithuania and other EU member states – this applies to both sales and purchases (dispatches/arrivals),
• purchase and sale transactions of goods within Lithuania,
• warehousing of goods in consignment warehouses,
• organization of live exhibitions/events/training/conferences (with an entrance fee paid on-site),
• selling goods to Lithuanian customers via the Internet,
• e-commerce sales, after exceeding the threshold of 42,000 EUR (this limit should be combined for B2C sales throughout the EU).

From July 1, 2021, if businesses selling online to Lithuanian customers exceed a turnover of 10,000 euros for all EU consumers, they can register for VAT OSS. This allows them to file one VAT return covering all EU member states and pay taxes based on the buyer’s country’s rates. If they don’t register for VAT OSS, they must follow all Lithuanian tax rules, but only for B2C sales.

Is a Lithuanian fiscal representative or agent required?

According to EU VAT directives, a local Lithuanian fiscal representative/agent is not required by a company based in another EU member state. However, companies operating outside the European Union are subject to this requirement. Exceptions occur when a company based outside the EU has entered into a cooperation agreement with Lithuania for tax administration. In such cases, the company is not obligated to appoint a fiscal representative.

What is the format of the Lithuanian VAT number?

Shortly after a company is registered for VAT (which usually takes three days), it receives a unique Lithuanian identification number. Each EU member state establishes the format of its VAT number. In the case of Lithuania, it consists of the prefix LT followed by a combination of 9 or 12 digits.

What are the deadlines for filing Lithuanian VAT returns?

Monthly VAT returns are filed on the same date as in Poland – that is, by the 25th day of the month following the reporting period.

Furthermore, in Lithuania, there is an obligation to file annual VAT returns. The deadline for submission is October 1st for the preceding year. There is also an obligation to file annual VAT returns.

Lithuanian VAT penalties

If VAT returns are filed incorrectly or if there is a delay in their submission, foreign companies may be subject to penalties. Delays in submitting VAT returns are subject to minor fines and a fee of 0.03% for each day of delay. There are also penalties for incorrect reporting, ranging from 10% to 50% of the unpaid VAT (depending on the circumstances). VAT in Lithuania becomes statute-barred after five years. Fraud cases are an exception – in these cases, the limitation period is extended to eight years.

Compliance with Lithuanian VAT

Once a company is registered as a Lithuanian VAT payer, its owner is obliged to adhere to local regulations that specifically concern VAT payments in Lithuania. This includes:

• issuing all invoices containing sensitive data as specified in the Lithuanian VAT Act,
• maintaining accounting records, which should be kept for at least 10 years,
• properly invoicing their customers for the acquisition of goods or services (in accordance with Lithuanian VAT regulations regarding the time of delivery),
• processing credit notes and other similar corrections,
• applying pre-approved foreign currency exchange rates.

VAT rates in Lithuania

RATE	TYPE	TYPE OF GOODS OR SERVICES
21%	standard	all goods and services not covered by the reduced VAT rate,
9%	reduced	some domestic passenger transportation, accommodation in hotels, district heating, books (excluding e-books), firewood,
5%	reduced	pharmaceutical products,
0%	zero	intra-Community and international transportation.

Very similar VAT rates apply in the neighboring country – also check out our text on VAT in Latvia.

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