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December 2014 Newsletter | Leinonen Lithuania

Dear reader,

Leinonen Lithuania is pleased to announce that Algirdas Kviklys, Senior Tax Advisor who gained his tax consulting experience in one of the Big4 companies joined Advisory Unit.

Algirdas gathered years of tax consulting experience while being engaged in significant tax optimisation and tax risk management projects, has a great knowledge on taxation issues related to international trading and other transactions. Algirdas provided tax consulting services to entities operating in financial, insurance, retail, production, construction, transport, energy and other sectors. One of the main specialisation areas of Algirdas – indirect taxation and application of the Union Customs Code.

At the end of the year 2014 we would like to draw your attention to:

Restriction on transfer of tax losses

The year of 2014 are the first for which restriction to transfer tax losses is actually to be applied, i.e., only 70 percent of a taxable profit calculated for such tax period can be reduced by accrued tax losses.

Tax incentive on investment project

In 2014 an application of the tax incentive on investment projects was extended until 2018. Such a relief allows companies to renew their fixed assets and to reduce a taxable profit up to 50 percent.

Thus, in case you have invested in your fixed assets, we would recommend estimating possibilities to reduce a taxable profit by expenses on:

Application of CIT rate of 5 percent

    Despite the fact that CIT rate of 5 percent is already in force for several years in Lithuania, we still notice that a number of small enterprises do not apply such a relief.

    What could we expect in taxation for 2015?

    Change of place of supply of services for VAT purposes

      Starting from 2015 amendments to regulation on place of supply of telecommunications, broadcasting and electronic services come into force. It would be considered that above mentioned services are supplied where a purchaser non-taxable person is established.

      MOSS (Mini One Stop Shop)

      In order to simplify compliance with VAT obligations for EU suppliers in EU Member States where a non-taxable purchaser of telecommunications, broadcasting and electronic services is established, tax administrators of EU Member States introduced “One Shop” systems using which VAT will be paid only in a State of a supplier and later allocated to another EU Member States. The Lithuanian system titled MOSS can be found at the website of the Lithuanian Tax Authorities.

      Application of zero-rated VAT

      In the field of VAT one of the hottest topics remains an application of zero-rated VAT on intra-Community supply of goods. There are plenty of so-called “fraud” cases that reached courts in Lithuania and the Lithuanian Tax Authorities seek to prove that a Lithuanian supplier acted fraudulently and negligently when applying zero-rated VAT.

      It is likely that in 2015 the Lithuanian Tax Authorities would still pay much of attention on efforts of a supplier to know its purchaser and to the quality of documents that should justify VAT treatment applied.

      Tax reliefs

      The Lithuanian Tax Authorities also actively investigates application of tax reliefs in order to evaluate its substantiality and sufficiency of justifying documentation. Also there are a lot of attention on tax losses carried forward, especially in Lithuanian companies controlled by foreign entities as the issue of transfer pricing is of significant importance within such structures.

      Amendments to tax administration

      Currently there are a few amendments introduced in the Parliament of Lithuania to the Law on Tax Administration. It is considered that such amendments would increase efficiency of procedures on recovery of tax arrears, tax control and disclosure of additional information to the Tax Authorities. If adopted, such amendments would affect the tax control process applied by the Tax Authorities, therefore, we shall provide updates in the future.

      Despite the fact that there are no significant amendments to the tax legislation in 2015, activeness of the Lithuanian Tax Authorities and evolving tax practice might require additional efforts successfully complying with tax obligations during the next year.

      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:


      Head of advisory unit

      tel. +370 656 51728



      Senior Tax Advisor

      tel. +370 662 94443


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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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