Lithuania joined the European Union in 2004. Although the country is not a part of the Eurozone, Lithuania has pegged its currency –the lita – to the Euro.
VAT rates in Lithuania
The standard rate of VAT is 21%, and reduced rates of 5%, 6% and 9% are available.
VAT registration in Lithuania
The VAT registration limit in Lithuania is LTL 155,000 for established businesses, but zero for non-established businesses.
Distance sales have a limit of LTL 125,000 for VAT registration.
The format for a VAT identification number is: LT 123456789 10 11 12. Every company must hold a number like this in order for accurate taxation.
VAT returns should be filed monthly or bi-annually. Annual returns are not required, although an annual statement needs to be filed if adjustments are made to input VAT.
Are there any Intrastat thresholds in Lithuania?
Yes. There is a limit of LTL 750,000 for dispatches and LTL 700,000 for arrivals.
VAT recovery in Lithuania
- Is VAT recovery permitted for non-established non-EU businesses?
Yes, Lithuania allows VAT recovery for non-EU countries but only those with a reciprocity agreement, i.e. Armenia, Canada, Croatia, Iceland, Norway, Switzerland and Turkey.
- Are there any non-VAT recoverable expenses?
Yes, recovery of input tax is restricted on certain items, i.e. business entertainment and cars.
Reverse charge applies to the majority of cross border services. An extended charge applies to Lithuania VAT registered customers supplied by a non-established business.
Requirements and regulations in Lithuania
Any company established in a non-EU member country must appoint a tax representative to register for VAT in Lithuania.
Use and enjoyment rules apply in Lithuania.
The period of VAT recovery by tax authorities has a timescale of 5 years in order to prevent fraud.
Similarly, there is a period of 5 years for VAT deductions and refunds.
Please contact us for further information about paying taxes in Lithuania, and a member of our team will be happy to help you.