Registering for VAT (Value Added Tax) in Lithuania is mandatory for businesses meeting certain criteria. Here’s what you need to know:
Criteria for VAT Registration: Businesses must register for VAT in Lithuania if their taxable turnover exceeds a certain threshold within a 12-month period. As of the latest information, the threshold for mandatory registration is 45,000 EUR. However, businesses may opt for voluntary registration even if their turnover is below this threshold to reclaim VAT on expenses.
Steps to VAT Registration:
Preparation: Gather necessary documentation including proof of business registration, identification documents, and financial statements.
Application: Submit an application for VAT registration to the State Tax Inspectorate (STI) of Lithuania. The application can usually be filed online through the STI’s electronic services platform.
Processing: The STI will review the application and may request additional information or documents for verification.
Confirmation: Upon successful registration, the STI will issue a VAT registration certificate confirming your VAT taxpayer status.
Benefits of VAT Registration:
Credibility: VAT registration enhances your business credibility as it signifies compliance with tax regulations.
Reclaim VAT: Registered businesses can reclaim VAT paid on business expenses, reducing costs.
Business Expansion: VAT registration enables trading within the EU Single Market without barriers related to VAT.
Compliance and Ongoing Obligations:
VAT Returns: Registered businesses must file periodic VAT returns, typically on a monthly or quarterly basis, depending on their turnover.
Invoicing Requirements: Issue VAT-compliant invoices to customers and maintain accurate records of VAT transactions.
VAT Rates: Understand different VAT rates applicable to goods and services sold within Lithuania and the EU.