General principles of taxation in Lithuania
The Law on Tax Administration, originally adopted in 13 April 2004, sets out the general taxation principles in Lithuania. This law sets basic concepts and regulations which must be observed in implementing the tax laws of Lithuania, the basic principles of legal regulation of taxation, the list of taxes applied in Lithuania, the functions, rights and obligations of the tax administrator, the rights and obligations of the taxpayer, the calculation and payment of taxes, the procedure of enforced recovery of taxes and related amounts as well as the procedure for the settlement of tax disputes.
The general, overriding principle used in the application of tax laws is that, in cases where matters are regulated by a special law, the special law (e.g. VAT, corporate income tax) will apply rather than the general Law on Tax Administration.
The most common state duties in Lithuania
According to the law, duties are imposed either by the state or municipalities. The state imposes duties on a number of different items. The most common state duties are:
- Company registration duty 198 LTL (approx. 57,4 EUR) for limited liability company [UAB] registration within 3 business days.
- Amendments to the Articles of Association cost 92 LTL (approx. 26,6 EUR) for registration within 3 business days. Registration of changes to the Board and other records costs 10 LTL (2,89 EUR) for the change of one domain (registration within 3 business days).
- The duty for the registration of a new branch (performing commercial activity and without legal entity status) is 50% off the registration of type of legal entity (as for instance if UAB’s branch is registered the cost will be 198 LTL off 50% which equals to 99 LTL (approx. 29 EUR) for registration within 3 business days. The registration of respective amendments duty is LTL 10 (2,89 EUR) for one domain for registration within 3 business days.
- The duty for the registration of a new representative office (not performing commercial activity and without legal entity status) of a foreign entity or organization is 200 LTL (57,4 EUR) for registration within 3 business days. The registration of respective amendments duty is 10 LTL (2,89 EUR) for registration of one domain within 3 business days.
- The duty for reorganization registration is: 10 LTL (2,89 EUR) for every changed domain and the registration will be made within 3 business days;
- Regarding immigration, the state duty for issuance of a temporary residence permit is 100 LTL (28,9 EUR), document administration in 4 months is 300 LTL (86,7 EUR), document administration in 2 months – 600 LTL (176 EUR). Wherewith permanent residence permit – 150 LTL (43,3 EUR) for document administration and 100 LTL (28,9 EUR) for issuance of residence permit;
- Registration of land for natural persons in the Center of Immovable property depends on the market price of the property and varies from 20 LTL (5,8 EUR) for land which market price is up to 1000 LTL, to 1000 LTL (289 EUR) state fee for the registration of land which market price exceeds 1 mln LTL (289 855 EUR); for legal entities the state fee is 80 LTL (23,12 EUR) for registration of land which market price is to 10 000 LTL (2890 EUR); from 10 001 (2891 EUR) to 100 000 (28 900 EUR) LTL state fee is 80 + 0,3 % (23,12 EUR + 0,3 %); from 100 001 (28 900 EUR) to 1 000 000 (289 855 EUR) LTL state fee is 350 + 0,3 % (101,2 EUR + 0,3%) of difference between the object’s medium market price and 100 000 LTL; and for land which value exceeds 1 000 000 (289 855 EUR) LTL state fee is 3050 + 0,2 % (1011,5 EUR + 0,2%) of difference between the object’s medium market price and 1 000 000 LTL, but not more than 5000 LTL (1449 EUR). For the registration of buildings or premises concerned, the state fee for natural persons varies from 10 LTL for building or premises which market price is up to 50 000 LTL (14 490 EUR) and from 130 LTL (38 EUR) state fee for legal persons for building or premises which market price is up to 50 000 LTL. The state fee for registration of premises or buildings cannot exceed 1000 LTL (290 EUR) for natural persons and 5000 (1449 EUR) for legal persons.
- Regarding the registration of trademarks: state fee for registration of trademark is 240 LTL (70 EUR); for every single additional class – state fee is 120 LTL (35 EUR). For the prolongation of the term – 240 LTL (70 EUR); for every single additional class of prolongation – 120 LTL (35 EUR).
Taxes in Lithuania
Taxes levied by the central government are:
1) value added tax;
2) excise duties;
3) personal income tax;
4) immovable property tax;
5) land tax;
6) state natural resources tax;
7) petroleum and gas resources tax;
8) tax on environmental pollution;
9) consular fees;
10) stamp duty;
11) inheritance or gift tax;
12) compulsory health insurance contributions;
13) contributions to the Guarantee Fund;
14) state-imposed fees and charges;
15) lottery and gaming tax;
16) fees for the registration of industrial property objects;
17) corporate income tax;
18) state social insurance contributions;
19) tax on a surplus amount in the sugar sector;
20) production charge in the sugar sector;
21) customs duties;
22) deductions from income under the Law of the Republic of Lithuania on Forestry;
23) tax on the use of state property by the right of trust;
24) social tax;
25) one-off tax on additional quota for white sugar production and on supplementary quota for isoglucose production.
26) market place duty
Taxpayers are entitled to defer payment of certain taxes. Unpaid taxes are subject to a late-payment fee the rate whereof is set by the Minister of Finance. Late payment amounts no longer increase when the late payment equals the original debt amount.
The amount of tax penalties imposed depends on the type and delay of tax non-compliance. Late filing of tax declarations results in penalties of no more than 500 LTL for the first breach. However the second breach results the increased penalty of up to 1000 LTL. If the evasion of taxes occurs – the penalty is from 2000 LTL to 4000 LTL if no criminal charges are met.
A taxpayer is allowed to make voluntary corrections to a tax declaration for a 5-year period after the payable term, if an audit by the tax administration has not been commenced. The taxpayer remains his right to apply for the voluntary corrections to tax declaration even if the audit by the tax administration was commenced, however in this case the tax authorities has the right to decline it. That results in the cancellation of any penalties pending for tax non-compliance.
All decisions of the tax authorities may be appealed to the Tax administrator, Tax Litigation Commission and Court. Decisions of tax administrator may be appealed to Tax Litigation Commission within the period of 20 days of the date the decision was received.