Details

  • Service: Tax
  • Type: KPMG information, Publication series
  • Date: 3/8/2012

March, 2012 

Tax and Legal Newsletter

Tax on Oil and Natural Gas Resources

As of 1 July 2012, the rates of tax on oil and natural gas resources shall change

As of 1 July 2012, the basic rates of tax on oil and natural gas resources shall be established based on the location and the annual volume of extraction but not on the date when the extraction of oil and gas resources was started. The Annex to the Law on Tax on Oil and Natural Gas Resource sets forth the new basic rates and the decreased intervals of extraction volumes in metric tons.

If not only state funds have been used for exploration of deposits, a compensatory rate of 9 percent shall be reduced in proportion to the share attributable to funds other than state funds but not more than down to 4.5 percent.

A tax relief of 50 percent regarding reduction of the calculated annual tax by the amount of costs incurred for search of new deposits and their exploration works was repealed. The tax relief was applied to the taxpayers that maintained the deposits where the extraction began before 1 July 2003.

The requirement to file a list of performed search of new deposits and their exploration works when filing the tax return has been cancelled.

 

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Tax on Environment Pollution

As of 1 January 2012, the rates of tax on environment pollution have changed for some products

With effect from 1 January 2012 the rates of environment pollution tax have changed for the following products:

    • Galvanic cells – 10 Litas/kg (previously, – 0.5 Litas/kg),
    • Fuel and lubricant filters for internal combust engines – 1.6 Litas/kg (previously, 1 Litas/pcs),
    • Suction air filters for internal combust engines – 1.6 Litas/kg (previously, 1 Litas/pcs),
    • Vehicle hydraulic (lubricant) shock absorbers – 1.2 Litas/kg (previously, 3 Litas/pcs).

Note that the tax on environment pollution by product waste shall be paid by producers and importers.

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Excise duties

As of 1 January 2012, excise duty rates have changed for fermented beverages and certain fuel and will change for cigarettes, cigars and cigarillos as of 1 March 2012

For fermented beverages the following excise duties shall apply:

    • Wine and other fermented beverages with the actual ethyl alcohol concentration by volume (in the case of other fermented beverages – such concentration obtained only by fermentation) in percent not higher than 8.5 percent – 58 Litas per hectolitre (previously, 53 Litas/hl)
    • Other than the fermented beverages and wine mentioned above – 198 Litas per hectolitre (previously, from 198 Litas/hl to 216 Litas/hl);
    • Intermediate products with the actual alcohol concentration by volume in percent not higher than 15 percent – 216 Litas per hectolitre (previously, 198 Litas/hl)

Furthermore, excise duties shall not apply to coal, coke and lignite when sold to or otherwise transferred to the ownership of

    • Individuals, or
    • Public legal entities qualifying as charity recipients in accordance with the Law on Charity and Support.

 

As of 1 March 2012, a specific element of combined excise rate for cigarettes (Litas per 1,000 cigarettes) shall be 140 Litas (previously, 132 Litas) and the total combined excise rate shall not be lower than 232 Litas per 1,000 cigarettes (previously, 221 Litas).

The excise duty rate for cigars and cigarillos shall be 84 Litas per kilogram (previously, 80 Litas).

 

The Regulations on providing evidences with regards to loss or destroying of excisable goods have been amended

By Order No. VA-144 of the Head of the State Tax Inspectorate under the Ministry of Finance of the Republic of Lithuania, the Regulations, which set forth the procedure of providing of the evidences on an irrevocable loss or complete destroying of excisable goods, for which no excise duties have been paid and which cannot be used as excisable goods in order to avoid an obligation to pay excise duties or set off or refund the overpaid excise duty amount, were approved. Furthermore, the Regulations set forth the procedure for taking the decision by the state tax inspectorate which specifies that the goods have been lost due to force majeure or have been irrevocably lost due to other circumstances or have been completely destroyed.

 

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Value added tax

VAT invoices with regards to goods acquired from other Member States shall be registered in the Register of VAT Invoices Received

With the effect from 1 January 2012, the requirement for keeping the registers of output VAT on goods or services acquired, when the goods are purchased from another Member State or when, according to the provisions of the Law on VAT, the obligation to calculate output VAT falls on the purchaser, was waived. However, these VAT invoices shall be registered in the Register of VAT Invoices Received (Form FR0671).

 

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Personal income tax (PIT)

Up to 1 percent of PIT paid by residents may be transferred to political parties

By Order No. 1K-046 of the Minister of Finance of the Republic of Lithuania of 7 February 2012, the Description of the Procedure for Transfer of Part of the Paid Personal Income Tax to the Charity Recipients and (or) Political Parties was approved. The Description shall apply to transfer of part of PIT according to applications of 2012 and subsequent years.

The Description specifies that up to 2 percent of PIT may be transferred to one or more entities entitled to such support in accordance with the Law on Charity and Support of the Republic of Lithuania, and (or) up to 1 percent (inclusive 1 percent) of PIT to one or several political parties registered with the Register of Legal Entities in the manner prescribed by legal acts if such political parties meet the requirements of the laws with regards to the number of members and for which no restructuring or liquidation procedures have been initiated.

The PIT relief shall remain also in the case when payments for studies are refunded due to very good studying results

The State Tax Authorities (Letter No. (18.16-31-1)-R-995) inform that the compensation of the payment for studies due to very good studying results shall not be deemed as refundable price for the studies or its part and shall be recognised as non-taxable income of the individual. Consequently, the compensation of the study price paid does not revoke the right of permanent residents of Lithuania to deduct the amount paid previously for the studies in higher education institutions (a university or a college) from the taxable income in the manner prescribed by the Law on PIT.

Taking the above into consideration, no obligation to adjust the tax return for the period, when the relief was applied, arises.

 

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Social insurance contributions

In summer the relief related to social insurance for the individuals employed for the first time expires

As of 1 September 2012, the provision according to which the persons, who are employed under an employment contract for the first time and whose salary does not exceed the amount of three minimum monthly salaries, are not compulsory covered by pension social insurance for no more than one employment year, becomes void (unless extended).

 

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Labour law

The rate of delay interest for late payment of labour related amounts was changed

Starting from 1 February 2012, the amount of delay interest of 0.07 percent per day shall be charged. This delay interest shall be calculated when the payment of a salary or other labour related amount is delay for the reasons which are not due to the employee‘s fault. The delay interest is charged after 7 calendar days of the date when the payment had to be done.

Court practice: reorganisation of a company is not deemed to be a legal basis to terminate the existing labour relations.

The Supreme Court of Lithuania (SCL) emphasized that during a reorganisation the labour relations of the employees employed in the entity which is being transferred by the reorganised company to the newly established company do not cease, and the rights and obligations arising thereof are passed over to the new employer. The latter has no right to refuse from such rights and obligations transferred. The SCL noted that employment contracts of the employees are passed over to the successor irrespective of the will of the parties (the reorganised entity and the newly established entity). Consequently, even if the reorganised entity and the newly established entity have not concluded an agreement on the transfer of the employees, the labour relations existing at the moment of the reorganisation shall not cease (Ruling of the Supreme Court of Lithuania No. 3K-3-8/2012 of 26 January 2012).

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Intellectual property

As of 1 March 2012, the list of the objects of „blank media levy“ was expanded

As of 1 March 2012, the amendment to the Law on Copyrights and Related Rights (the Law) comes into force. The amendment specifies an expansion of the list of blank media, which has already been in effect until now, for which a compensatory levy shall be paid to authors and performers of audiovisual or phonogram-recorded works as well as to producers of audiovisual works and phonograms. The list was supplemented with such media as flash memory cards, USB media, non-integrated disks of PCs, other reproduction equipment with internal memory – MP3, MP4 etc. players, mobile phones, TVs and TV tuners. A detailed list of taxable media and equipment and the rates of the compensatory levies are specified in Annex 1 to the Law.

An obligation to pay the compensatory levy shall be prescribed to producers, importers or wholesalers of the equipment.

 

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Miscelaneous

As of 1 March 2012, it is not obligatory to indicate the sales price of cigarettes on the tax sticker

By the amendment to Article 34 of the Law on Excise Duties, the regulation regarding indication of the maximum retail price of cigarettes was amended. According to the currently effective provisions cigarettes may not be sold at the price higher than the maximum retail price indicated on the tax sticker attached to the packet. The amendment sets forth that cigarettes may not be sold at the price higher than the maximum retail price indicated on the packet.

Consequently, as of 1 March 2012, it is not obligatory to indicate the sales price of cigarettes on the tax sticker while it may be indicated on any other place of the retail packet of cigarettes. If the price on the tax sticker differs from the price on the packet of cigarettes, the higher price shall be deemed to be the actual price.

 

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The newsletter has been prepared in accordance with legislation effective as at 23 February 2012 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.

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Contact

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