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VAT

Income Tax Law on Representation

Personal Income Tax

State Social Office Sodra

State Social Insurance from 2010

VAT Consumption for Private Needs

Accounting and Taxation

Prizes of the value not more than LTL 700 not for employees

Prize  > LTL 250, VAT 21%

Taxation  Law on Representation

0%

0%

0%

N/A

Tax free if a resident receives the prize up to LTL 700 not from employer. Prize to be received from the same person not more than 6 times per financial year. VAT law is applied if winner is chosen and prizes are granted.

Prizes of the value more than LTL 700 not for employees

21%

15%

15%

0%

0%

Applicable

If resident receives prizes of the value more than LTL 700 not from employer, tax withheld is applied for total value. If event is private, deductions are non-allowable.

Prizes of the value not more than LTL 700 for employees

Prize > LTL 250, VAT 21%

15%

0%

0%

0%

Applicable if > 250

If resident receives prizes of the value more than LTL 700 from employer, income tax withheld is applied for the value of prize exceeding LTL 700 and VAT is applied for total value.

Prizes of the value not more than LTL 320 not for residents

Prize > LTL 250, VAT 21%

Taxation  Law for Representation

0%

0%

0%

Applicable if > 250

From 2010 and earlier compulsory health insurance contributions not to be paid by person providing prizes but not being an employer

Prizes for residents of the value more than LTL 700

21%

0%

15%

3%

6%

Applicable if > 250

Prizes given to the employee or its family member are attributed to income related to labor relations.

Prizes not for employees of the value more than LTL 700

21%

15%

15%

0%

0%

Applicable if > 250

If resident receives prizes from employer of the value more than LTL 700, tax withheld is applied for total value. Prize to be received from the same person not more than 6 times during taxation period. VAT applied for total prize value.

Free transfer of goods for testing and research

0%

0%

0%

0%

0%

N/A

If  VAT payer produces (or sells) goods which have to be tested before selling, a certain amount of free of charge goods can be passed for consumption purposes (testing, research) to the company's laboratory, other research company or potential clients.

Food samples

0%

0%

0%

0%

0%

N/A

Food consumed during the sale is considered to be low value gifts and sale VAT is not calculated. When event is for promotion purposes and number of participants is not limited in advance, purchase VAT deductions on representative cost are not applied.

Promotion.

 Goods for free of the value not more than LTL 25

0%

0%

0%

0%

0%

N/A

VAT payer has to provide information in the free-form deed about the goods consumed during promotional event, place and time of event and other important circumstances. As the event was held for promotional purposes and a number of participants was not limited in advance, limitations on VAT deductions of representative cost are not applied.

Promotion

Goods for free of the value more than LTL 25

21%

0%

0%

0%

0%

Applicable

Goods of the value more than LTL 25 provided for free during a sale considered as gifts of greater value and sales VAT to be calculated from taxable value.

Satellite added to purchased good for free with respect to up to 5% of good value but not more than LTL 50.

0%

0%

0%

0%

0%

N/A

If costumer (client) buys goods or service and extra good or service is provided as a gratis by VAT payer of the taxable value that is not more than 5% of the customer's (client) purchased good or service and is not of higher value than LTL 50.

Gifts from residents of the value not more than LTL 8000

N/A

N/A

0%

0%

0%

N/A

Gifts despite of its amount, form (monetary or in kind) and frequency received from siblings, grandchildren, and gifts of the value not more than LTL 8000 received from other persons are not taxable.

All monetary gifts presented by legal persons to natural persons are taxable

-

15%

15%

0%

0%

N/A

Applied to all monetary gifts received from employer or other legal person. Person presenting gift has to calculate income tax and pay it to budget.

Gifts for employees

21%

0%

15%

3%

6%

N/A

Gifts presented to the employee or its family members by employer are treated as income received from labor relations. Non-taxable income rate is not applied; income tax is deducted and paid from the total value of a gift.

Business gifts not for employees of the value not more than LTL 250

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0%

0%

0%

0%

N/A

Taxable person, VAT payer gratuitously presents gifts for other persons to establish new business relationships or maintain existing ones (representation purposes). The gifts, not necessarily for VAT purposes, have to have company's logo or other related symbols or correspond to company's activity

Business gifts of the value more than LTL 250 but less than LTL 320 not for employees

21%

-

0%

0%

0%

Applicable

If value is more than LTL 250, a sale VAT has to be calculated from the good consumed by VAT payer for personal purposes. Non-monetary gifts of the values less than LTL 320 are not treated as income in kind received by a resident.

Representation, banquet for business partners at the 75% of the amount.

0%

0%

0%

0%

0%

N/A

Banquet for representation purposes is not treated as gift; however, representation costs are related to the activity on which VAT is applied.

Non-adjustable VAT deduction when gifts of low value are provided for promotion, representation, charity and (or) aid or  research purposes

Business gift has to have company's logos. For example, if bottle of wine is presented to a business partner not by wine producer, the gift is not treated as business gift. For example, cost for wine consumed together with business partners can be treated only as representative cost.