Tax & Legal Alert Contacts Issue No. 190 ▪ 19 June 2015

Tax & Legal Alert
Issue No. 190 ▪ 19 June 2015
Contacts
Kristina Kriščiūnaitė
Country Managing Partner,
Head of Tax & Legal Services
Email: [email protected]
Tel: +370 5 239 23 00
Nerijus Nedzinskas
Email: [email protected]
Tel.: +370 5 239 23 50
Aušra Miltenytė
Email: [email protected]
Tel.: +370 5 239 23 71
Lina Surplienė
Email: [email protected]
Tel. +370 5 239 2372
Rokas Bukauskas
Head of PwC Legal in Lithuania
Email: [email protected]
Tel. +370 5 239 2341
PricewaterhouseCoopers, UAB
J. Jasinskio 16B, Vilnius
Tel: +370 5 239 23 00
www.pwc.com/lt
The Tax & Legal Alert is produced by PwC Lithuania Tax & Legal Services
Tax & Legal Alert
May 2015
Tax News
Accounting
News
Tax & Legal Alert
provides the latest information on
changes in Lithuanian legislation most
urgent to our clients.
In this issue:

Excise Duties News

Corporate Income Tax news

Personal Income Tax and Social
Insurance Tax

General Information

Accounting News

Legal News

PwC Publications
Legal News
Publications
Tax News
Excise Duties News
Tax Authorities commented on
amendments to excise duty on
lubricating oils
The Tax Authorities provided comments on
amendments of taxation of lubricating oils with
excise duty that will come into force from 1
November 2015.
Excise duty rate is set for lubricating oils, used as
motor fuels, as heating fuel and as motor fuel
additives, i.e. if a company does not hold a permit,
the obligation to pay excise duty on lubricating oils
arises.
If lubricating oils for which excise duty was paid in
Lithuania are transported to another EU country,
the excise duty will be refunded, if evidence that
excise duty on such oils will be paid in another EU
member state (or that such oils are exempt from
excise duties) are presented.
Letter No. (18.2-31-2) RM-12078 issued by the Tax
Authorities on 26 May 2015.
Commentary on excise duties on owned
cigarettes
In cases when cigarettes from retail trade are
returned to wholesale due to objective reasons,
persons entitled to be engaged in wholesale trade of
tobacco products are not required to calculate and
pay the difference of excise duty on such cigarettes.
If such return is performed not due to objective
reasons but for a tax benefit, such persons would be
entitled to calculate and pay it.
Letter No. (18.2-31-2) RM-12081 issued by the Tax
Authorities on 26 May 2015.
Corporate Income Tax (CIT)
Financial reporting for non-profit
organisations
With amendments on the Law on Public
Organisations, the Law on Charity and Sponsorship
Funds, and the Law on Associations dated 23 April
2015, an obligation for public organisations,
associations and charity funds to submit financial
reports to the Register of Legal Entities was
introduced. Consequently, Art.51 of the Law on CIT
was changed – an obligation for non-profit
organisations to submit financial reports to Tax
Authorities was withdrawn.
Updated Law on CIT comes into effect from 1 June
2015 and is applicable for reporting CIT for the
period starting 1 January 2015 and later financial
periods.
The official Commentary on Art.9 Part 1 Point 9 of
the VAT Law was updated.
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Tax & Legal Alert
May 2015
Tax News
Accounting
News
Legal News
Publications
Press release issued by the Tax Authorities on 7 May
2015.
Press release issued by the Tax Authorities on 20
May 2015.
Principle of depreciation and
amortisation of fixed assets
Advance CIT calculation
The official Commentary on Art. 18 of the Law on
CIT, which covers depreciation and amortisation of
fixed assets, was supplemented. Main amendments
and supplements include:



in case when depreciation (amortisation)
period is shortened, new period cannot be
shorter than already passed depreciation
(amortization) period (including the financial
years when the period is shortened). If new
period is set to be shorter, fixed assets are
considered to be written-off and nondepreciated part of acquisition price of such
assets is not attributed to limited deductible
expenses;
when changing depreciation (amortisation)
period, remaining depreciation (amortisation)
period, i.e. new period less the period already
passed, cannot be shorter than it is stated in
the Appx. 1 of the Law on CIT;
once the approval to change depreciation
(amortisation) period is granted by the Tax
Authorities, new periods have to be applicable
for the whole specific fixed asset group, i.e.
same depreciation (amortisation) period
applies for both new and already acquired
fixed assets in the same fixed assets group.
The official Commentary on Art. 47 Part 2 of the
Law on CIT, which covers advance CIT, was
supplemented.
The Commentary explains that taxable income
reduction by investment project expenses (under
Art. 461 of the Law on CIT) should not be taken into
account while calculating advance CIT. However,
reduction by funds for the production of a movie (or
part of it) (under Art. 172 of the Law on CIT) can be
considered while calculating advance CIT.
Press release issued by the Tax Authorities on 5 May
2015.
Personal Income Tax and Social
Insurance Tax
Updated Commentary on the Law on
PIT
The Lithuanian Tax Authorities provided the
updated Commentary on Art.2 (Definitions) and
Art.17 (Non-taxable income).
The updated Commentary on Art.2 was
supplemented with practical examples when activity
should be treated as individual activity (when funds
are being borrowed, credits are being provided,
financial instruments are being sold). In the
updated Commentary on Art.17 references to the
Lithuanian Litas were replaced with the euros.
Press release issued by the Tax Authorities on 5 May
2015 and press release issued by the Tax Authorities
on 5 May 2015.
Regarding the start of Compulsory
Health Insurance coverage
The amendment to the Law on Health Insurance
which defines the beginning and the end of the
compulsory health insurance was adopted.
It is set in the Law that for those who work under an
employment contract, receive income under a
service agreement, income from sports and
performing activity and for other individuals listed
in Art 17, Part 1-3, the compulsory health insurance
coverage starts from the day when there is a basis
for making the contributions (e.g. individual is
employed) and is valid until the loss of status (e.g.
termination of employment contract).
Compulsory insurance for individuals who perform
individual activity, are members of the small
partnerships, individuals making contributions
personally and other individuals listed in Art 17,
Part 4-7 and 9, will come into effect from the day
when the contributions are actually paid and will be
valid until the end of the month during which such
payments were made.
Please note that in case the individual listed in Art
17 Part 4-7 and 9 of the Law on Health Insurance
did not made compulsory health insurance
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Tax & Legal Alert
May 2015
Tax News
Accounting
News
contributions and is not insured on other basis,
then his / her health insurance will come into effect
only when all the outstanding contribution amounts
which had to be paid from 2016 will be paid.
The above mentioned provisions will come into
force from 1 January 2016.
Amendment to Law on Health Insurance No. XII1733.
General Information
Accounting documents for calculating
taxes
From 1 June 2015 the acquisition of goods and
services can be supported with a cash register
receipt if the value of such goods and services does
not exceed EUR 100 including VAT (until 31 May
2015 the limit is EUR 290 including VAT). Such
costs of goods and services can be attributed to
expenses based on cash register receipt.
Cost of purchasing fuel can be recognised as
expenses with a cash register receipt, if a receipt has
statutory information required for cash register
receipts which helps to identify the purchaser and
the value of fuel purchased does not exceeds EUR
150. Requirements are applicable from 1 June 2015,
before that date no value limits are applicable (the
limit was applicable for VAT deduction purpose
only).
Legal News
Publications
Press release issued by the Tax Authorities on 20
May 2015.
Accounting
news
The Authority of Audit and Accounting
reorganisation conditions description
was prepared
By Order of the Lithuanian Government No 458,
dated 6 May 2015, the Authority of Audit and
Accounting, Property Valuation Oversight Agency
and Department of Enterprise Bankruptcy
Management under the Ministry of Economy will be
reorganized. Starting from 1 January 2016 the three
mentioned authorities will consolidated into one
authority called the Agency on Audit, Accounting,
Property Valuation and Insolvency.
Press release issued by the Authority of Audit and
Accounting.
The quality of review report
requirements of completed audits were
approved
By Order of the Director of the Authority of Audit
and Accounting No.VAA-13, dated 19 May 2015 the
quality of review report requirements of completed
audits were approved.
Legal News
Regulation of remote gambling
Amendments fill a gap in legal regulation and
establish a new regulation of remote gambling.
Until now remote gambling has been commonly
organised, but it was illegal due to the lack of
regulation. After the amendment comes into force,
companies which obtain a licence and meet other
mandatory requirements will be able to organise the
remote gambling.
Amendments also provide the requirements to
organise remote gambling, contract on remote
gambling, safeguards to the player’s interests and
grant a right to the supervisory authority to
supervise the remote gambling operators.
The draft law comes into force as of 1 January 2016.
Law Amending the Law on Gambling No. XIIP2843(2).
Additional restrictions for the members
of small partnerships
Amendments establish a restriction for the
members of the small partnership to conclude
agreements on provision of services with the small
partnership of which member they are. According to
the current legislation it is prohibited to have only
employment relationships with the small
partnership.
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Tax & Legal Alert
May 2015
Tax News
Accounting
News
If the member of small partnership increases his/
her contribution to fund the activities of the small
partnership, the public Register of Legal Entities
must be informed about such increase of the
contribution.
This draft law comes into force as of 1 January 2016.
Law Amending the Law on Small Partnerships No.
XI-2159.
New version of the Law on Corporate
Financial Reporting
According to the amendments preparation of
financial statements depends on the size of the
company, i.e. whether it is very small, small,
medium or large company. For example, small
companies are not obliged to draft reports on cash
flows and changes in equity, and very small
companies are not required to prepare any
explanatory note.
A new version of the Law on Company Financial
Reporting comes into force 1 July 2015.
Legal News
Publications
findings on financial statements to the Register of
Legal Entities.
If amendments were approved, they would come
into force one 1 January 2016.
Draft Law Amending Public Procurement Law No.
XIIP-3090.
Proposals to ensure transparency and
gender equality in the company’s
management
Amendments aim to strengthen participation of the
employees in the company’s management and
propose to establish a right of the representatives of
the employees to appoint not less than 1/5 of the
members of the supervisory board, but at least 1.
Amendments also aim to ensure the gender equality
in the company’s management and propose to
establish a requirement that not less than ¼ of the
company’s management board members, but at
least 1, shall be women.
Law Amending the Law on Companies No. 15-5484.
Publications
Lubricant oils that can be used as fuels
without special permits will be subject
to excise duties
On 26 May 2015 in article “Lubricant oils that can
be used as fuels without special permits will be
subject to excise duties” comments of Martynas
Bagdonas, Senior Consultant of PwC Tax & Legal
department were published in the daily newspaper
“Verslo žinios“.
Those who want to remain in the
market care about transparency
On 20 May 2015 article Those who want to remain
in the market care about transparency was
published in the daily newspaper “Verslo Žinios”,
where Rokas Bukauskas, Head of PwC Legal
Lithuania, commented on the regulation of
corporate governance when the company‘s CEO
participates in the board of directors.
Law Amending Law on Company Financial
Reporting No. IX-575.
Aiming to strengthen the conditions to
participate in public procurement
Amendment aims to allow for contracting authority
to reject the application from the supplier if the
latter did not provide the recent annual financial
statements and auditor’s report or the reviewer’s
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Tax & Legal Alert
May 2015
Tax & Legal Alert
Lithuania • 19 June 2015
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advice specific to their situation. No liability is accepted for acts or omissions taken in reliance upon the contents of this alert.
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