Lithuania emergency fuel VAT cut

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.