VAT in Lithuania: Foreign person registration as VAT payer in Lithuania

17 December 2012
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Gencs Valters law firm in Lithuania also provides services related to compulsory registration as a Value Added Tax (VAT) payer.

 

In the companies, where the total amount of the consideration for goods and/or services supplied during a year (in the last twelve months) exceeded LTL 155,000 (EUR 45,000) starting with the month when the above threshold was exceeded, must calculate, in accordance with the procedure,  VAT on supply of goods and/or services and pay it into the budget.

 

The subdivision of a foreign taxable person located in the territory of the country where that foreign taxable person supplies goods and/or services within the territory of the country must calculate the VAT on the goods and/or services supplied by the foreign taxable person within  the territory of that country and pay the VAT into the budget. The subdivision must, following the prescribed procedure, file an application to register the foreign taxable person as a VAT payer, without regard to the exceptions indicated above in respect of the LTL 155,000 (EUR 45,000) threshold.

 

Failure to file an application for registration as a VAT payer or rejection of the application to register a taxable person as a VAT payer will not relieve him from the obligation to calculate the VAT on supply of goods and/or services by him and pay it into the budget where this is obligatory.

 

 

Foreign person registration as VAT payer in Lithuania


When begins to supply goods or services and the place of such a supply is Lithuania (with some exceptions that are discussed further in the notice);

 

If acquires goods in Lithuania from another EU member state (except the new means of transport or the goods which are subject to excise duties) and the value of such goods was above the limit of 35 000 LTL (EUR 10159) last calendar year or it is foreseen that the value of such goods will be above the limit of 35 000 LTL (EUR 10159) this calendar year;

 

If the Lithuania was chosen as the place for distance selling or the value of the goods supplied in Lithuania under the distance selling scheme is above the limit of 125 000 LTL (EUR 36283), or the goods supplied under the distance selling scheme are subject to excise duties.

 

 

The cases when the registration of VAT payer in Lithuania is not obligatory


the foreign person supplies in Lithuania only such goods or services which are exempted;

 

the foreign person supplies only such goods or services which are outside the scope of VAT;

 

the foreign person supplies only such goods or services on which 0% VAT rate is levied (there are some exceptions which are discussed further in the notice);

 

the foreign person supplies only such goods or services in respect of which the buyer under Art. 95 (2) – (4) is obliged to charge and pay VAT in Lithuania;

the foreign person acquires goods from another EU member state but the value of such goods does not exceed the limit of 35 000 LTL (EUR 10 159) during the calendar year or the goods acquired from the other EU member state are the new means of transport or the goods subjected to the excise duties;

 

the foreign person supplies goods under the distance selling scheme and the value of the goods which were brought to Lithuania during the calendar year does not exceed the limit of 125 000 LTL (EUR 36 283) (except the cases when the goods supplied are subjected to the excise duties).

 

 

Obligation to register as VAT payer arise for the foreign person though the goods and services supplied are subjected to the 0% VAT rate

 

supplies goods which are placed in temporary storage in the place of temporary storage under the customs control;

 

supplies goods which are placed in a free zone or placed in a free warehouse;

 

supplies goods which are placed under customs warehousing or under customs-controlled processing arrangements or imported under a declaration for transit arrangements with exemption from import duty;

 

supplies goods where the goods are transported to a VAT warehouse or goods which are placed under the arrangement of a VAT warehouse within the territory of the supply country where this circumstance is still in effect during the supply;

 

supplies agency/agent’s services in transactions specified above or other transactions of supply of goods mentioned in Art. 53 (1) of the Law;

 

supplies services directly relating to the goods which are placed under certain custom procedures or which are placed under the arrangement of VAT warehouse.

 

When does the obligation to account for VAT in relation to the goods or services supplied in Lithuania arise to the buyer

 

the foreign person is not established in Lithuania (or supplies the services through the branch in another country) and supplies the services mentioned in Art. 13 (2) of The Law (e.g. transfer of copyright and related rights, consultants, lawyers, auditors, accountants, services, telecommunication services, electronically supplied services, etc.), and the buyer of the services is a taxable person;

 

the buyer is a taxable person and acquires the services of hiring out of transport means which are supplied by the person established outside the European Community (or by the branch outside the European Community) and the effective use of the supplied service takes place within the territory of the country;

 

if the buyer is registered as VAT payer in Lithuania and the goods acquired are installed or assembled in Lithuania;

if the buyer is registered as VAT payer in Lithuania and acquires the services of valuation of movable property, also work thereon (repair, maintenance, adjustment, etc.), processing and alteration;

 

if the buyer is registered as VAT payer in Lithuania and acquires natural gas or electricity, and the place of supply of such goods is considered to be Lithuania under the Art. 12 (6) of the Law;

 

if the buyer is registered as VAT payer in Lithuania and acquires the agent’s services, mentioned in Art. 13 (2) of the Law;

 

if the buyer is registered as VAT payer in Lithuania and acquires the transportation services of intra-Community transportation of goods as well as the services of an agent in procuring services of acquisitions or supplies of intra-Community transportation of goods specified in Art. 131 of the Law;

 

if the buyer is registered as VAT payer in Lithuania and acquires the goods which are sold to him under the triangular trade scheme.

 

If the foreign person carries out other activities than mentioned above and does not register as VAT payer in Lithuania, the buyer of the supplied services or goods must account for the VAT if the buyer is a taxable person. However it does not mean that the obligation for the foreign person to register as VAT payer in Lithuania does not exist anymore.

Persons from territories outside the area of the European Communities are registered through their branch in Lithuania, and where they do not have such branch – through the fiscal agent appointed to act in Lithuania.

 

The requirement to appoint a fiscal agent to act in Lithuania is not applicable to persons from EU member states. Such persons may be registered as VAT payers directly, i.e. they personally (or their authorized representatives) apply to the district State Tax Inspectorate (further – DSTI) filing the application.

For questions, please, contact Valters Gencs, attorney at law at info@gencs.eu


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The material contained here is not to be construed as legal advice or opinion.

© Gencs Valters Law Firm, 2014