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May 2015 Newsletter | Leinonen Lithuania

Dear reader,

Leinonen Lithuania regularly informs about important practical issues in the fields of accounting, taxation and legislation and helps to follow the main changes in this area. We are interested to get know you and discuss your business financial and tax concerns.

Are you interested in finding out an opportunity to drive down the cost of your investment or operations plan?

Give us a call and we will meet you at your convenience to discuss your business operations.

Would you like to find out the tax risks involved in your business sector?

We would gladly meet you and introduce the main tax risks of your sector.

We are pleased to share our knowledge and expertise with entrepreneurs, finance departments and other persons involved in business.

Please find the following core changes during last months and easily pick up the topics relevant to your business:

To the attention of companies willing to employ trainees: contract for voluntary traineeship

From 1 January 2015 the amendments to the Law on Support for Employment have come into force, which have enforced the voluntary traineeship and provide with the opportunity to enter into bilateral contracts for voluntary traineeship between the company and the trainee in the absence of a third party (e.g. training institution). Such contracts may be concluded with a person under 29 years and for less than a 2-month period.

The company may enter into agreement for voluntary traineeship with the same person only once and the number of such contracts in the company shall not exceed 10 % of the overall number of working places. The company must advise SODRA of every contract for voluntary traineeship and the trainees must be covered by health and accident insurance through public finances.

To the companies applying the special VAT taxation (margin) scheme for tourism services

Until 31 December 2014

VAT margin scheme is applied when a VAT payer from the third parties acquired tourism services and later provided them to the final user.

From 1 January 2015

VAT margin scheme is used when when a VAT payer from the third parties acquired tourism services and later provides them to any customer (i.e. to further reseller).

Relevant to the companies engaged in contracting of construction works

Since 1 July 2015 the service buyer – VAT payer taxable person, who orders the construction works and is issued the certificate on the termination of works (provision of services), must withhold and pay to the budget the amount of VAT, calculated for the construction works, defined in Article 2 paragraph 15 of the Law on Construction of the Republic of Lithuania, and completed by the service provider according to Article 7 (4) of the Law on Value Added Tax.

If you produce or import packaged products and empty packaging

From 1 November 2015 companies that produce or import packaged products or empty packaging will be obliged to fill in the declaration of compliance for packaging supplied to the domestic market of the Republic of Lithuania. All the packaging articles must be marked by providing true specification of their composition according to the approved marking procedure. Only the packaging articles in compliance with the packaging requirements defined in the Law on the Management of Packaging and Packaging Waste may be supplied to the market.

  • If the company imports packaged goods and (or) empty packaging from any Member State of the European Union, declaration of compliance may be presented by the supplier subject only to the translation of such document into the Lithuanian language. In such a case the company will not be requested to fill in additionally the mentioned declaration.
  • If the company imports from the third countries or the EU supplier cannot present the declaration of compliance, it is necessary to perform laboratory tests and fill in the declaration.
  • When the packaging material is purchased in Lithuania, the declaration of compliance shall be presented by the manufacturer or importer of such packaging.

Judgment of the Court of Justice of the European Union relevant to the companies that post their employees to work in other countries

On 12 February 2015 the case C-396/13 (Sähköalojen ammattiliitto ry) by the Court of Justice of the European Union reminded that the Directive on Posting of Workers defines that the determination of minimum rates of pay is based on the legal acts and national practice of the host Member State and the calculation procedure and criteria thereof shall be also determined by the host Member State. Given this, if the host country has determined clear and transparent rules concerning the assignment of employees to a certain group, the sending state shall observe such rules for the calculation of the minimum pay of employees within a certain group.

Daily allowance and compensation of travel time are paid not for the scope to compensate the actual expenses related to any business trip, therefore, are considered as a part of minimum pay. However, the compensation of accommodation expenses and meal vouchers as the compensation of actual living expenses of employees, related to the business trip, cannot be considered as minimum rate of pay.

Articles

Leinonen tax consultant: international trade – one of the major tax risks

As the interest of the State Tax Inspectorate is still on the increase in terms of validity of zero VAT application, the companies engaged in international trade should pay particular focus on proper documenting of all the transactions. Companies must be critical in assessing the risks that may be caused due to improper/insufficient documentation of transactions. For more information on the problems on international trade please read here.

Future events where Leinonen shares it’s experience

Conference on current pharmaceutical issues: legal news, the present and the future

On 14 May 2015 Leinonen Lithuania will participate in the conference on current pharmaceutical issues: legal news, the present and the future. The conference will present the amendments made to the pharmaceutical legislation, system of reimbursement of medicinal products, current issues on the application of protective means on packaging of medicinal products. Algirdas Kviklys, chief tax consultant of Leinonen Lithuania, will review tax risks in the pharmaceutical sector (application of quantitative discounts or discounts in kind to distributors, trading offers, free of charge products, property given on the grounds of loan for use contracts, problems of advertising and representation concepts, as well as programmes for medical staff promotion).Click here to see the invitation.

Seminar on international trade: what do the company documents reveal?

On 21 May 2015 Leinonen Lithuania is organising a practical seminar on international trading issues in Kaunas. The seminar will focus on the review of practical aspects of documentation of international trade agreements, as well as dealing with the risks in applying zero-rate VAT. Algirdas Kviklys, chief tax consultant of Leinonen Lithuania, will share the experience of representing customers in tax audits and communicating with the specialists from the State Tax Inspectorate, as well as discuss the practical situations and different schemes. Click here to see the invitation.

Every client is special to us and we try to help everyone in every way we can.

Having almost 20 years of experience in Lithuania we create and assist in manging accounting and tax policies for our clients who are business start-ups, companies with great history or even those listed on International stock exchange.

Are you interested to find out how we can help you? Please contact:

MAŽENA BIRBALIENĖ

Head of advisory unit

tel. +370 656 51728

e-mail: mazena.birbaliene@leinonen.lt

ALGIRDAS KVIKLYS

Senior Tax Advisor

tel. +370 662 94443

e-mail: algirdas.kviklys@leinonen.lt

Contact Us Now

Leinonen Group is a Finnish-owned private accounting and advisory company, which was established already in 1989. Leinonen Group helps companies enter and succeed in challenging business environments by offering reliable accounting, payroll management, advisory, administration, and audit services. The deep local expertise and personal service approach, combined with wide international presence, is our strength. Our 13 offices can be found in the main cities of 11 countries – Finland, Sweden, Norway, Estonia, Latvia, Lithuania, Poland, Bulgaria, Hungary, Russia, and Ukraine.

Read more: www.leinonen.eu

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Best Regards

Leinonen Lithuania

Vilnius | Kaunas

+ 370 5237 5040

leinonen@leinonen.lt

www.leinonen.lt