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July 2014 Newsletter | Leinonen Lithuania

Dear Reader,

Leinonen Lithuania has established an advisory unit. Besides assisting clients in company establishment and liquidation processes, consulting on labour issues, advising on tax and accounting policies, communicating with tax authorities on behalf of the client, providing tax and human resource compliance services, this unit provides summary of tax, accounting and legislation news to clients and other interested parties.

Please find below the main changes that were introduced during second quarter of 2014:

Tax, accounting, and legislation changes

Euro in Lithuania

Law on the Introduction of the Euro

The Law on the Introduction of the Euro of the Republic of Lithuania was adopted on 17 April 2014, whereby the procedure on the introduction, changeover and use of the euro has been defined. The official currency exchange rate will be approved by the Council of the European Union on 23 July 2014.

Currency exchange

Dual circulation period

Retailers are required to start indicating prices for goods (services) in litas and euro at the places of their communication no later than 30 calendar days following the day of fixing of the conversion rate and to do this no shorter than within 6 months from the adoption of the euro.

Cash payments after the adoption of the euro:

Recalculation:

Continuity of legal documents

After the euro adoption day any reference in legal documents to LTL will be considered a reference to EUR after conversion at the conversion rate

Labour relations

Amendments to the Labour Code

State Tax Inspectorate under the Ministry of Finance of the Republic of Lithuania (STI)

Projects, performed by STI – thematic inspections

Every year the STI performs thematic inspections. In 2014, the projects that were started in 2013 will be continued “Būstas be mokesčių" (Housing without Taxes) (aim is to increase declaration of income earned by Lithuanian citizens abroad and tax payment in Lithuania), “Baltieji chalatai" (White Smocks) (aim is to review accounting and payable taxes of medicine, odontology and veterinary enterprises), as well as new ones are in effect:

STI action “Nuostolinga įmonė” (Unprofitable Enterprise)

This year the STI will follow and control over 200 most risky companies with unprofitable performance within the last four years. In the informative communication the STI underlines that it will be especially active in evaluating the companies the operating losses whereof have increased with the improvement of the economic situation. Last year, 35,700 tax payers declared of having suffered losses in their activities for LTL 5.7 billion. The STI will seek to identify:

whether all the income was declared (e.g., big loans were granted to the persons involved without interest or with the especially low interest)

whether operating expenses have been increased impermissibly (e.g., shareholders’ travels, marketing services expenses, bad debts)

STI action “Skaidri gamyba” (Transparent Production)

It is sought by this project to clarify the companies in the manufacturing production sector which probably conceal the added value and profit taxes, not accounting part of the income received or reducing the sales value by other methods. At present the STI is inspecting the companies involved in the production of food products, chemicals and chemical products, rubber and plastic products – within this and the forthcoming year inspections of 300 most risky production enterprises in total will be performed.

Other Actions

Atsakinga statyba" (Responsible Construction). Aim is to ensure the accounting of the income of all the participants of the process from the developers to the builders, the reasonableness of permissible deductions and fair declaration of taxes and their timely payment.

Ratai" (Wheels). Aim is accounting of car sellers and providers of their repair services, evaluation of the property and income of the company management.

Šou be šešėlių" (Show without Shadows). Aim is to ensure fair accounting of income and losses and tax calculation and payment of the selected entertainment events to be held in 2014.

Receipt FR0508 for purchase-sales of goods/services

From 1 May 2014 Receipts FR0508 for purchase-sales of goods/services may be issued only by the persons, performing their activities according to the business certificates. Residents, performing their individual activities according to the certificate, must issue an invoice, VAT invoice or cash-register receipt.

Recommendations for inspection of the reliability of the future business partners

The STI communicated the updated recommendations to be of help in protecting from the consequences of the illegal activity of unfair business partners. It is proposed to spare no efforts in making sure that they are trading with honest business partners who are registered in the corresponding registers and perform their activities and all their tax obligations in the procedure prescribed by legal acts.

The STI gives an opportunity to check in their system whether Lithuanian business partners submit their main tax declarations in due time or whether they are in debt with the budget. Information may be checked by  by pressing the button below:

Persons executing tax obligations on time / with tax arrears

Deposit system for one-way packaging

Since February 2016 the deposit system for one-way packaging will come into force. Upon the enforcement of the deposit system for one-way packaging, manufacturers and importers who place on the national domestic market beer, beer cocktails, cider, alcoholic cocktails and non-alcoholic beverages (fresh beverages, table water, kvass), natural mineral water, spring water, packed drinking water, juice and nectar, packed into primary one-way glass, plastic or metal packaging with a capacity of more than 0.1 l but less than 3 l should take a deposit for that packaging.

Do you need advise in Lithuania?

Leinonen Lithuania helps companies enter and succeed in the Baltic and Lithuanian markets.

If you need any help or more detailed information, please contact:

MAŽENA BIRBALIENĖ

Head of advisory unit

tel. +370 5 237 504 0

e-mail: mazena.birbaliene@leinonen.lt

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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.

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Best Regards

Leinonen Lithuania

Vilnius | Kaunas

+ 370 5237 5040

leinonen@leinonen.lt

www.leinonen.lt

Leinonen Lithuania

Labdarių g. 5, Vilnius
Lithuania

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