VAT changes in Lithuania in 2012

Since 2012 the company has the obligation to register as a VAT payer in Lithuania if its turnover per year is more than 45.000 EUR (instead of 29.000 EUR, which was before the year 2012). It is expected that this amendment will be the incentive to start the small business. "Turnover per year" means only the turnover received from the selling goods and supplying services in the country's territory (before these changes all the turnover including sales and services outside the country's territory were taken into account).

Moreover, in case the turnover per year of the person / legal person who is not registered as VAT payer exceeds 45.000 EUR, the VAT shall be calculated and paid not only from the part exceeding this amount, but from all the transaction's value which was the reason of exceeding the limit.

For one year the preference VAT rate for the heating as well as for a hot water (9 %) and for recoverable pharmaceuticals (5 %) was prolonged. General VAT rate in Lithuania remains 21 %.

Starting from 2012, general VAT rate of 21 % is again applied for the hotel services and special settlement services (for the period from 1 Jan 2011 to 31 Dec 2011 there was a preferred VAT rate of 9 % applied).