VAT Registration in Lithuania
A taxable person in the Republic of Lithuania, referred to as a “Lithuanian resident taxable person,” can be either a legal entity or an individual who conducts economic activities within Lithuania. It also includes a collective investment enterprise that operates in the Republic of Lithuania, even if it lacks legal personality, provided it is involved in investment fund activities.
In order to enrol for VAT, taxpayers are required to submit an application to the local tax administration. This application can be conveniently submitted electronically to the tax authorities.
Register for VAT in Lithuania
Registration Threshold
Individuals or entities subject to taxation (regardless of residency in Lithuania) are typically required to enrol for VAT in Lithuania when they provide goods or services within the country. This registration is mandatory unless the defined registration limit is not surpassed, or if the services fall under the reverse charge procedure.
According to section 71(2) of this law, surpassing the Lithuanian VAT registration threshold occurs when the total payment received by a taxable party for goods or services provided in Lithuania exceeds 45,000 euros over the previous 12 months. In the event that this limit is exceeded, registration for VAT becomes obligatory within the month of surpassing the threshold.
Voluntary Registration
For VAT reasons, a person who is not compelled to register as a Lithuanian VAT payer might do so freely and complete voluntary identification. To be registered for VAT purposes and receive the privilege of deduction of input VAT, anybody who conducts or wants to conduct an economic activity can submit a request to the local State Tax Inspectorate.
To register for VAT, taxpayers must submit an application to the local tax administration. The application can be submitted electronically to the tax authorities.
Global VAT Compliance’s dedicated VAT team can help you register for VAT in Lithuania. Contact our experts for a first assessment of your business.
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Registration exemptions in Lithuania
Taxable Persons
A Lithuanian resident taxable person refers to a legal entity or an individual who:
- Conducts any economic activity within Lithuania.
- A collective investment enterprise involved in investment fund activities.
- Established within the country without legal personality.
Voluntary Registration
Individuals who are not obligated to register for Lithuanian VAT may opt to do so voluntarily. Any person who engages in or plans to engage in economic activities has the right to apply to the local State Tax Inspectorate for VAT registration and obtain the privilege of deducting input VAT.
Non-residents who engage in taxable activities are not subject to a registration threshold, meaning that they are required to register for VAT regardless of the amount of their sales. Other taxpayers, however, may be subject to a registration threshold and may not need to register if their sales are below a certain level.
Exemption from Registration
If the overall compensation received by Lithuanian resident taxable persons for the goods or services supplied within Lithuania falls below the registration threshold, they are generally exempted from VAT registration.
Furthermore, there is no duty to register when:
- A non-resident, who is not established in Lithuania, applies a reverse charge to the supply made within Lithuania.
- The supply is exempt from VAT.
- The supply would be subject to a zero rate of VAT. Nonetheless, there are certain instances where mandatory VAT registration is necessary even when the zero rate of VAT is applicable.
Group and Divisional Registration
In General
For VAT purposes, each taxable person is treated as a separate entity, regardless of any financial, economic, or organizational connections between them. In Lithuania, group VAT registration is not allowed, and it is not possible for partnerships or closely related taxable persons to file a joint tax return.
In Partnerships
Notaries and advocates who collaborate and receive goods and services as a group are permitted to receive and issue invoices on behalf of a single natural person (partner). The Ministry of Finance establishes the identification number using a specific system. This special VAT grouping arrangement emerged because notary offices and law firms cannot register for VAT separately since notaries and advocates are registered as distinct entities in Lithuania.
Registration, non-resident
Intra-Community acquisitions made by non-residents also trigger a registration obligation, unless their intra-Community acquisitions do not exceed the intra-Community acquisition threshold.
Non-residents must register before for VAT in Lithuania, unless:
- Their supplies are exempt from VAT or are subject to zero-rate VAT.
- The reverse charge mechanism is applicable to their supplies.
- Their only supplies are distance sales that do not exceed the distance sales threshold, as defined by the revised rules effective July 1, 2021.
VAT Representative
A Fiscal Agent is an individual who is involved in specific activities, such as providing legal, accounting, auditing, and tax consulting services. In addition, they must be registered as a VAT taxpayer for a minimum period of three years. However, the requirement of a three-year registration period does not apply to individuals engaged in auditing or who are licensed attorneys. EU businesses have the option to appoint a VAT representative, while non-EU businesses are obligated to appoint a VAT fiscal representative.
Distance Sales
The EU ecommerce VAT package reforms, which came into effect on July 1st, 2021, require non-Lithuanian EU e-commerce sellers who ship goods from within the EU to charge local Lithuania VAT on all sales. This includes imported distance sales that do not exceed €150 and are subject to Lithuania sales VAT. However, sellers have the option to use the Import One-Stop Shop (IOSS) return system to simplify their VAT obligations.
Last Updated: 24/01/2024
Disclaimer
The information provided by Global VAT Compliance B.V. on this webpage is intended for general informational purposes only. Global VAT Compliance B.V. is not responsible for the accuracy of the information on these pages, and cannot be held liable for claims or losses deriving from the use of this information. If you wish to receive VAT related information please contact our experts at support@gvc.tax
