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Changes to restrictions related to VAT refund

We would like to inform that on 26 June 2020 the amendments on Law on Value Added Tax (further – VAT) were adopted, which establishes changes of restrictions to VAT refund.

According to the mentioned amendments on Law on VAT, from 1 January 2021, the restrictions established by Part 2 Article 91 of Lithuanian Law on VAT (for example, refund of conditional VAT amount due to supply of goods or services subject to 0% VAT rate and other), applied to VAT refundable amount for the relevant taxable period, will not be applicable for VAT payers who meet the minimum reliable taxpayer criteria.

In such case, VAT refundable amount for the relevant taxable period will be refunded in accordance with the general procedure established by Lithuanian Law on Tax Administration, i.e. primarily VAT refundable amount will be used to cover the taxpayer‘s tax arrears, then the remaining amount will be refunded according to VAT payer's request within 30 days of the receipt of such request or the submission of additional documents.

The mentioned existing restrictions to VAT refund will be applied only to VAT payers who do not meet the minimum reliable taxpayer criteria established by Article 40¹ of Lithuanian Law on Tax Administration, i.e. VAT refundable amount for such VAT payer‘s for the taxable period will be refunded not earlier than 6 months after the occurrence of the overpayment.

The mentioned amendments are applicable for VAT refund accruing from 1 January 2021.

Should you have any questions, please do not hesitate to contact Leinonen Tax team. We would be happy to provide more information about the mentioned changes and answer other queries related to your business.

The information above was prepared by the Leinonen Tax team.

At Leinonen we aim to provide up to date information regarding the latest changes and development in the business sphere of Lithuania. We suggest that you follow our LinkedIn page for news, discussions or general communication with us - LinkedIn/Leinonen. 


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