September, 2013 

Please enjoy the September edition of the Tax, Legal and Accounting Newsletter.

Kind regards,
KPMG in Lithuania

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Personal income tax (PIT)

Payments of small partnerships to their members – B class income.

An explanation is provided in the information notice of the state tax inspectorate (STI) that a member of a small partnership, who is also its head, may receive the following type of income from the small partnership:

    • According to a service agreement (income type code 70);
    • Income related to employment relations or relations corresponding to the essence of employment relations (income type code 02);
    • From the distributed profit (income type code 26).

In accordance with the provisions of the Law on Personal Income Tax, the above mentioned income shall be treated as B class income from which PIT shall be declared and paid by the Lithuanian resident. Income received from a partnership by a non-resident as a member of the small partnership shall be treated as A class income. Please note that A class income also include income paid under service agreements to heads of small partnerships (non-members).


A commentary of Par. 4, 5 and 6 of the Law on PIT regarding a fixed amount of PIT when acquiring a business certificate was supplemented.


A commentary of Par. 4, 5 and 6 of the Law on PIT was supplemented. It explains how a fixed amount of PIT shall be calculated; when municipalities may apply lower fixed PIT amounts; when a tax payer has no right to levy income received when acquiring a business certificate and has an obligation to register an individual activity according to a certificate. The commentary provides practical examples.

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Value added tax (VAT)

A commentary of Art. 83 of the Law on VAT regarding credit and debit documents was amended and supplemented.

A commentary of Par. 1, 2 and 3 of Art. 83 of the Law on VAT, which explains when an obligation to issue a credit VAT note or a debit document arises and which entity should issue the document, was amended and supplemented. Furthermore, the commentary specifies what references should be indicated on the documents and provides practical examples.

A publication issued by the state tax authorities on VAT application on land and other real estate was amended and supplemented.

A publication of the state tax authorities “VAT Application on Land and Other Real Estate” was amended and supplemented. The amendments set forth in what cases sale of land and other real estate is deemed to be an economic activity and how it should be taxed. The publication also provides practical examples. The publication is available here.

Rules for registration of an EPRIS user were amended.

By Order VA-49 of the Head of the State Tax Inspectorate under the Ministry of Finance of 6 August 2013, the Rules for Filing of Electronic Requests on Refunding of Value Added Tax Paid in other European Union Member States were amended.

The amendment ensures that applications for registration as a user of the Electronic Requests for Registration with the Information System (EPRIS) shall be filed and identification means shall be obtained via the electronic services domain Mano VMI of the State Tax Inspectorate under the Ministry of Finance. The amendment also specifies that the requirement to indicate the reason due to which the person, a user of EPRIS, requests for new identification means has been repealed, the standard request form has been changed as well as other technical amendments have been made.

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Excise duties

A publication on levying of electric energy with excise duties was prepared.

A publication of the state tax authorities “Levying of Electric Energy with Excise Duties“ was prepared. It explains in what cases electric energy shall be levied with excise duties when the energy is sold or used for own needs. The publication is available here.

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Social insurance contributions (SODRA)

Simplified payment of social insurance contributions.

Please be aware that insurers and self-insured persons who pay social insurance contributions themselves can use the Bank-link service established in the electronic service system of the insurers. This service allows to pay different social insurance contributions and other related amounts to the SODRA account by single payment order. More detailed information is available here.


The deadline for the decision on pension accumulation shall be taken by 30 November.


Please note that the individuals who have signed agreements on participation in the pension accumulation system before 2013 shall decide by 30 November on the following:

    • should they return to SODRA,
    • should they continue accumulation in private pension funds in the same manner as until now,
    • or should they continue accumulation by making additional payments at their own expense and receiving additional contributions from the state budget.


If neither of the alternatives is chosen before this date, the individuals will participate in the pension accumulation system according to the current conditions, i.e. certain part of social insurance amount will be transferred to private pension funds.


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The newsletter has been prepared in accordance with legislation effective as at 16 September 2013 which is subject to change retroactively or prospectively and any such change might affect the contents of the newsletter. We accept no obligation to update you should law or understanding change the contents of the newsletter in the future.

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.


 

Contact us

Birutė Petrauskaitė

Birutė Petrauskaitė

Head of Tax and Legal

+370 5 2102600

Vita Šumskaitė

Vita Šumskaitė

Senior Manager, Tax

+370 5 2102600

Inga Šutaitė

Inga Šutaitė

Lawyer

+370 46 480 012