Legislative Update - International Law Office

Value Added Tax Law
Profit Tax Law and Law on Income Tax of Individuals

Value Added Tax Law

The recent amendment to the Value Added Tax (VAT) Law permits (i) enterprises that deliver long-term services to retain VAT invoices in electronic format, and (ii) enterprises that provide goods and services which are exempt from VAT, as regulated by the Lithuanian government or authorized institution, to omit certain data normally required on VAT invoices by the VAT law.

The VAT Law came into effect on January 5 2004. Persons eligible for taxation must keep documents in the form (written or electronic) in which they were originally received or written.

Given that enterprises delivering long-term services (eg, telecommunications) send a large volume of written invoices to their clients and safeguarding such on paper would result in considerable additional expense, the amendment allows enterprises that deliver long-term services to store paper invoices solely in electronic format.

According to the law, some of the account information which is normally necessary may be omitted where invoiced goods or services are delivered to persons exempt from VAT.

It can be difficult for enterprises which deliver VAT-exempt goods or services and perform a large number of daily operations (eg, banks) to present all data on VAT invoices required by the VAT Law. The amendment allows such enterprises to omit some information. The goods and services provided must not be taxable with VAT and must be included in a government-approved list.

Profit Tax Law and Law on Income Tax of Individuals

On August 2 2004 some small technical changes were introduced into the Profit Tax Law and the Law on Income Tax of Individuals. The amendments insert direct references to relevant legal acts of the European Union, in order to apply directly EU tax legislation to the Lithuanian tax system and ensure long-term conformity.

For further information on this topic please contact Dr Dalia Foigt at Foigt & Partners/Regija Borenius by telephone (+370 5 264 95 55) or by fax (+370 5 260 83 27) or by email (d.foigt@regija.lt).