Corporate income tax (PM)
Version 03 of the Annual Corporate Income Tax Return Form PLN204 may be completed and submitted via the electronic declaration system.
A notification of the state tax authorities of 7 May 2012 states that Version 03 of the Annual Corporate Income Tax Return Form PLN204 may already be completed and submitted via the electronic declaration system (EDS). The new version of the return shall be used for calculation and declaration of payable corporate income tax payable for the taxable period starting in 2011 and subsequent taxable periods.
In the cases, when Version 02 of the Annual Corporate Income Tax Return Form PLN204 for the taxable period starting in 2011 has already been submitted, the same Version 02 shall be submitted when adjusting the return for the same taxable period.
A commentary of Par. 2, Art. 16 of the Law on Corporate Income Tax (hereinafter - the Law on CIT) regarding increase of the asset value, when the asset is sold as scrap, was updated.
The commentary was supplemented with the explanation that when an entity sells the asset, for which it had calculated depreciation and had treated the calculated depreciation as partly allowable deductions, as a scrap, then the sales price is treated as taxable income, while the residual value of the assets - as allowable deductions.
An obligation to recalculate CIT does not occur when after reorganization the entity‘s losses are carried forward and later on the entity is liquidated.
The commentary of Par. 5, Art. 43 of the Law on CIT was supplemented with Subpar. 4 (1) which sets forth that, when an entity, which has been reorganized, is liquidated within 3 years, it is not required to recalculate the taxable income of the respective period due to the losses transferred and to adjust the annual CIT return
The commentary of Art. 21 of the Law on CIT regarding recognition of business trip costs was amended.
The commentary of Art. 21 of the Law on CIT sets forth that the costs of a business trip abroad, when the business trip documents are dated not in the period of the business trip, may be treated as allowable deductions only when there were no possibilities to go to and to come back from the foreign state in the period of the business trip or it was more beneficial to the entity to acquire travel tickets to (or from) the foreign country not in the period of the business trip. The company should have a free form document (e.g. printed travel schedules with prices) supporting the said circumstances. This provision shall not apply if the dates of the travel documents are not in the period of the business trip due to personal interests of the employee and to his benefit (e.g. vacation). The commentary also specifies that daily allowances of the business trip not exceeding the rates of daily allowances for the period, which is not longer than indicated in the business trip order, may be treated as partly allowable deductions.
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Personal income tax (PIT) and property declaration
Changes related to individuals engaged in activities under business certificates.
As of 1 May 2012 the new provisions of legal acts regulating the procedure of taxation of income received from activities under business certificates came into force. The major amendments are as follows:
- It was set forth that a business certificate issued for the sale of goods and provision of services to individuals as well as for the sale of only self-produced goods and provision of services (except for lease of dwelling premises) to legal entities is valid if the income earned from sale of self-produced goods and provision of services to legal entities does not exceed 10 percent of the total income for the tax period received from the activities specified in the business certificate. For the purpose of calculation of the threshold of 10 percent for 2012, the total income received in the period from 1 May 2012 to 31 December 2012 shall be included. If the income earned from legal entities exceeds the 10 percent threshold, the total income received from legal entities since 1 May 2012 shall be taxed as the income from individual activities.
- Furthermore, a limitation, specifying that a business certificate for any kind of activities allows to sell self-produced goods and provide services to legal entities only if the type of the activity is not one of the activities actually performed by the legal entity, was adopted.
- Income from activities under business certificates does no longer include income received from the sale of goods to individuals for the purpose of their individual trade activities (also including activities under a business certificate). Besides, income received from wholesale activities cannot be treated as income from activities under business certificates. Such income is taxed as income from individual activities.
- The list of types of activities does not include marking of separate types of activities with marks “x” and “xx”. The list, which came into effect as of 1 May 2012, was reworded.
- The type of activities – distribution of periodic press printings – is eliminated from the list.
Property shall be declared only by residents of Lithuania.
As of 28 April 2012, Par. 2, Art. 2 of the Law on Declaration of the Property of Residents came into effect. It sets forth that the persons (state politicians, state officials etc.) specified in Subpar. 1-23, 29 and 30, Par. 1, Article 2 of the law shall declare their property if they are deemed to be residents of Lithuania in accordance with provisions of the Law on Personal Income Tax of the Republic of Lithuania. Consequently, non-residents of Lithuania specified in the mentioned paragraphs shall not be obliged to declare their property.
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Value added tax (VAT)
A commentary of Art. 71 of the Law on VAT regarding registration for VAT purposes was amended.
The commentary of Art. 71 of the Law on VAT related to amendments to the Law on VAT, which came into force as of 1 January 2012, specifies an obligation to calculate and (or) pay VAT to the state budget and the obligation to register for VAT purposes. The commentary was supplemented with new practical examples.
A commentary of Par. 2, Art. 66 of the Law on VAT regarding adjustment of VAT deduction was supplemented.
The supplement to the commentary of Par. 2, Art. 66 of the Law on VAT is related to the amendment to the law which came into effect as of 1 January 2012. The commentary explains other reasons, not depending on the VAT payer, due to which the VAT deduction is not adjusted. Practical examples are included in the commentary.
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On the 1st of September, parents will walk their children to school without tension.
On 24 April an amendment to the Labour Code, specifying that employees who are bringing up one child under 12 attending secondary school will have at least a free paid half a day on the first day of the school year, came into force. The Labour Code also sets forth that the employee is paid his average labour remuneration for it.
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The capacity and efficiency of activities of the Competition Council are enhanced.
As of 1 May 2012, the Law on Amendments to the Law on Competition of the Republic of Lithuania which aims at enhancement of the capacity of the Competition Council by providing more powers in investigation of violations and collection of evidences came into effect. Major amendments to the law specify that the Competition Council will have a right to collect the necessary information from any individual or legal entity; the conditions of the notification on the expected concentration in the market were changed and the liability for non-fulfillment of these conditions was tightened. Furthermore, additional rights of the Competition Council during investigations were set forth and the procedures for protection of commercial secrets of business entities were described in more detail. The new wording of the Law on Competition specifies that the use of impermissible comparable information is also considered to be an action of unfair competition.
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The procedure of use of cash registers has changed.
As of 1 May 2012, the following amendments regarding the use of cash registers came into force:
- The state tax authorities may identify cases when a person is not required to use a cash register if the use is not possible due to objective reasons or may result in excessive administrative burden on the tax payer.
- Furthermore, the persons engaged in individual activities are not required to use cash registers, except the individual trade activities. Individuals engaged in individual activities and performing trade inside premises (not outside), should use cash registers in their activities.
A new version of Declaration Form KIT708 regarding the tax on mineral resources, water and construction soil was approved.
By Order No. D1-238/VA-34 of the Minister of Environment of the Republic of Lithuania and the Head of the State Tax Inspectorate under the Ministry of Finance of 19 March 2012, new versions of Declaration Form KIT708 regarding the tax on mineral resources, water and construction soil and its supplementary sheet form KIT708P as well as the rules for their completion and submission were approved.
The change is related to the amendment to the Law on Tax on State Natural Resources which sets forth that the taxable period as of 2012 is a calendar quarter of the year but not a calendar year.
The mentioned order prescribes that the declaration shall be submitted by the tax payers who extract (use) state natural resources under licenses issued in accordance with the Law on Environment of the Republic of Lithuania and other legal acts. The declaration shall be submitted to the state tax authorities of counties within a month following the end of the taxable period for which the tax is declared. The declaration for the 1st quarter of 2012 shall be submitted and the tax shall be paid by 30 April 2012.
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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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