When a foreign company has obligation to register as VAT payer?
Following the provisions on the Art. 71 of Law on VAT, foreign company is obliged to register as VAT payer in Lithuania in the following cases:
- When the company supplies goods or services and the place of such a supply is Lithuania. Registration shall be done immediately before or after such supply has started.
- If the company acquires goods in Lithuania from another EU member state (except the new means of transport or the goods which are subject to excise duties) and the value of such goods was above the limit of 14 000 EUR last calendar year, or if it is foreseen that the value of such goods will exceed the above limit this calendar year.
In case when goods/services are supplied, there is no threshold for foreign companies, the obligation to register arises from the first EUR which is earned in the territory of Lithuania. How long the company carries out its activities is also not taken into consideration. For example, if a foreign company will organize an event in Lithuania and the attendees of such event will be passive listeners, the obligation to register as VAT payer arises immediately after the first ticket is sold.
In case of purchase of goods from another EU country, the company shall buy and bring the goods physically to the territory of Lithuania. Bill of lading, consignment or other type of shipping document is considered a sufficient proof. When verifying if the limit of 14 000 EUR was reached, value of goods which are subject of 0% VAT or not taxable with VAT in Lithuania is excluded.
When a foreign company does not have to register as VAT payer?
The obligation to register as VAT payer for the foreign person does not arise in the following cases:
- If the company supplies in Lithuania only such goods or services which are VAT-exempted;
- If the company supplies only such goods or services which are outside the scope of VAT;
- If the company supplies only such goods or services on which 0% VAT rate is levied;
- If the company acquires goods from another EU member state but the value of such goods does not exceed the limit of 14 000 EUR during the calendar year or the goods acquired from the other EU member state are the new means of transport, or the goods subjected to the excise duties.
What documents the company should provide?
To register as VAT payer in Lithuania the company shall provide the following documents and information:
- Extract from Commercial Register which indicates persons with signing rights as well as ultimate beneficiaries;
- Information about the accountant in the country of origin;
- VAT number in the country of origin (if any);
- Description of activities in Lithuania;
- List of business partners in Lithuania;
- Address of premises in Lithuania (if any);
- Invoices (if any);
- Consignments, bills of lading (if any);
Please note that the list of documents is not exhaustive. Tax Authorities may ask for other documents depending on individual circumstances of the applicant.
If you are interested in registering your company as VAT payer in Lithuania, please do not hesitate to contact our tax and legal experts.