VAT Returns & Recovery in Lithuania
The Lithuanian VAT Law requires businesses to file monthly VAT returns, with the deadline for submission falling on the 25th day after the end of the taxable period. However, if the previous calendar year’s annual income of a taxable legal person did not exceed 300,000 euros, they may request to change the VAT return period to three months.
Additionally, businesses may apply for a specific VAT return period that is most suitable for their circumstances, but the period cannot exceed two months.
Read more about VAT returns and VAT recovery in Lithuania in our comprehensive guide below.
VAT Returns in Lithuania
For natural persons, the standard VAT return period in Lithuania is six months, but this may be changed to one month upon request. There are no specific regulations for calculating annual income for global companies operating both in Lithuania and abroad. According to the VAT Law and official guidelines, the calculation of annual income must include all types of revenue from economic activities subject to VAT, as well as income from VAT-exempt activities (i.e., activities not subject to VAT).
In connection with the ratio of VAT-exempt and taxable transactions, a yearly return of input VAT must also be filed. The annual return is due on the first day of October of the year following the tax year in which it is filed.
Interests and Penalties
Lithuanian tax authority is authorized to charge interest on overdue VAT payments. Interest accrues from the day following the due date of the VAT payment and is recalculated every three months based on the prevailing interest rate. Information on the current interest rate is available on the website of the State Tax Inspectorate.
taxpayers may face penalties for non-compliance with the VAT Law. The severity of the penalty is determined by the nature of the violation and other relevant factors such as the taxpayer’s cooperation with the tax authorities and acknowledgement of the violation. The penalty can range between 10% to 50% of the unpaid VAT amount. There are no specific penalties for the failure to provide a VAT invoice when required. However, taxable persons who violate common commercial and business activity regulations may face fines ranging from 144 euros (500 litas) to 289 euros (1000 litas).
Selling in Lithuania?
VAT Recovery in Lithuania
In Lithuania, businesses can deduct input and import VAT from the output VAT payable. Input VAT is the VAT paid or payable on purchases of goods and services. If the input VAT is higher than the output VAT payable, the excess amount can be carried over to future tax periods or claimed as a refund.
To be eligible for a deduction, input VAT must meet certain conditions. These conditions include:
- Providing evidence that the goods or services were used for taxable purposes.
- The recipient of the supply must typically be a VAT registered entity.
- A valid VAT invoice must be held to support the VAT deduction. If a written VAT invoice is lost, a certified copy of the invoice by the parties involved in the transaction is usually required.
Within the statutory statute of limitations period, input VAT can be reclaimed at any time. The tax authorities remit the extra VAT within 30 days after receiving the application, or within 20 days if a tax audit is conducted.
Last Updated: 03/11/2023
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
