VAT in Lithuania guide

VAT rates

The term “taxable supplies” refers to supplies of goods and services that are liable to a rate of VAT.

The standard rate of VAT applies to all supplies of goods or services unless a specific measure provides a reduced rate, the zero rate or an exemption.

The VAT rates are as follows:

• Standard rate: 21%
• Reduced rates: 9% and 5%
• Zero rate: (0%)

Lithuanian VAT for digital service providers

For digital services, telecommunication services or broadcasting services supplied B2B (business-to-business), the place of supply is the place where the recipient is established. No Lithuanian VAT should be charged and the reverse charge may apply unless a supplier and a customer are both established in Lithuania.

For digital services, telecommunication services or broadcasting services, supplied to final consumers (B2C) context, effective 1 January 2015 until 31 December 2018, Lithuanian VAT was due for supplies to customers that are permanent residents in Lithuania irrespective of where the supplier is established. Starting from 1 January 2019, different rules apply for nonresident and resident service providers.

Until 31 December 2018, a nonresident supplier that supplies B2C digital services was required to register for and charge Lithuanian VAT on these supplies. However, effective 1 January 2019, the digital services, telecommunication services or broadcasting services shall not be deemed to be provided in the territory of the country (i.e., no Lithuanian VAT shall be charged), when all the following conditions are met:

• Service provider is established in one EU Member State only and does not have a branch in any other EU Member States; or if service provider is established outside the EU and has a branch in one EU Member State only.
• The amount of the digital services, telecommunication services or broadcasting services supplied to nontaxable persons does not exceed EUR10,000 in the current and preceding calendar year.
• The service provider has not chosen to deem the place of supply of these services to be in Lithuania.

One-Stop Shop

On 1 July 2021 EU has introduced a so-called “One-Stop-Shop” (OSS) system which has replaced a previously applied “MiniOneStopShop” (MOSS) system. OSS has extended the scope of MOSS from digital goods and services to all goods and services sold B2C in the EU. OSS is an electronic portal that simplifies VAT compliance for online sellers, i.e., online businesses that sell goods and/or services in the EU are now only required to register for VAT in one EU country for all their B2C sales in the EU. If such sellers’ B2C sales in EU are above the applicable threshold, which is 10.000,00 EUR throughout the EU, businesses are liable to charge, collect and remit VAT in the Member State where their B2C buyers are located, instead of the Member State or country of their incorporation, i.e. online sellers have to apply the VAT rate of the Member State where the goods are dispatched or where the services are supplied. AS each EU Member State has an online portal where businesses can register for OSS and submit their VAT returns in one Member State for their B2C sales throughout the EU, it is estimated that VAT compliance costs will be significantly reduced. Registration in the OSS system is available for both – taxable persons established in the EU and outside the EU.

VAT Registration Lithuania

The obligation for VAT registration in Italy might be triggered in different ways. Here is the the list of most common scenarios:

• Importing goods into Lithuania from non-EU countries;
• Buying and selling goods in Lithuania (excluding domestic reverse charge);
• Selling the goods from Lithuania to customers in other countries (B2B or B2C);
• Acquiring goods in Lithuania from another EU country (Intra-community acquisitions);
• Holdinging and storing inventory in Lithuania for selling, distribution or consignment;
• E-commerce sales of goods to Lithuanian consumers, subject to Distance Selling VAT registration thresholds;
• Organising events in Lithuania where attendees or delegates are paying admission.

Late – registration penalties

• Information about unreliable taxpayer will be available for third parties.
• Longer limitation periods will be applied during the operational inspection.
• Unreliable taxpayers will lose the right to participate in public procurements.
• Unreliable taxpayers will not be able to obtain the status of a beneficiary or will lose the respective status.

Fiscal representative Lithuania

Non-EU business which are selling in Lithuania will have to appoint a fiscal representative for the VAT registration and compliance in Lithuania.
Fiscal representative is jointly liable for the VAT compliance duties for non-EU companies.
Need a Fiscal Representative Service in Lithuania? 1StopVAT can provide it together with other Global VAT/GST/Sales tax compliance services.