The TEA calculation formula and the size of the TEA for people with disabilities will change from 2022. Below is a comparative table of changes of TEA from 2022.
|
Monthly TEA calculation formula |
TEA for persons with limited working capacity |
|
0-25% |
30-55% |
||
Changes from 2022.01.01 |
1) TEA = 460 EUR, when the monthly wage does not exceed EUR 730; 2) TEA = 460 - 0,26 * (MI - 730), when the monthly wage exceeds EUR 730, but does not exceed EUR 1 678; 3) TEA = 400 - 0,18 * (MI - 642), when the monthly wage exceeds EUR 1,678; |
740 EUR |
690 EUR |
|
Yearly TEA calculation formula |
|
Changes from 2022.01.01 |
1) TEA = 5520 EUR, when the annual income does not exceed EUR 8760; 2) TEA = 5520 - 0,26 * (AIR - 8760), when the annual income does not exceed the amount of 12 average wages - 20136 EUR (1 678 EUR x 12); 3) TEA = 4 800 – 0,18 * (AIR – 7 704), when the annual income is more than 20,136 EUR (but less than 34,370.67 EUR); |
|
* Abbreviations used in TEA calculation formulas
TEA no longer applies when the monthly wage exceeds 2 865 EUR. The threshold for applying the annual TEA in 2022 remains the same as in 2021, i.e., 34 370,67 EUR.
The employee's annual income threshold, at which the PIT rate of 32% is applied, changes. The PIT rate of 32% will be applied to the part of the employee's income from employment exceeding 60 average wages (hereinafter - AW; 90,246 EUR).
Employers must pay
social security tax from at least the minimum monthly wage. From 2022 with the
increase in minimum monthly wage in Lithuania, the minimum amount from which
social security tax must be calculated is 730 EUR. The table below provides a
comparative analysis of social security tax changes.
|
Employee social security tax |
Participation of employee in pension scheme |
Employer social security tax |
Social security limit |
From 2022.01.01 |
19,50% |
2,7% or 3% |
1,77% |
For the part of the employee's salary income exceeding 60 AW (90,246 EUR) |
From 2023.01.01 |
19,50% |
3% |
1,77% |
For the part of the employee's salary income exceeding 60 AW |
The Law on Corporate Income Tax (hereinafter - CIT) has been supplemented with a special rule for eliminating the cause of non-compliance with the tax procedure. The special rule eliminates one of the causes of tax inconsistencies - different legal regulation or treatment of the taxable unit (hybrid entity) - and thus prevents the consequences of tax inconsistencies.
The reason
for the discrepancies in the tax procedure is eliminated by treating the
Lithuanian hybrid entity as a Lithuanian taxable entity. In order to avoid
double taxation of the same income, the tax base of such an entity includes the
part of the income that is not otherwise.
The amendment to Article 58 of The Law on CIT stipulates that the income tax exemption for the income from the use of the relevant intellectual property assets of companies carrying out large investment projects for large projects shall apply only to those taxpayers which are engaged in research and experimental development activities and subsequently receives revenue from the use of the relevant intellectual property assets.
Paragraph 4 of Article 57 of The Law on CIT is repealed, so it will no longer be necessary to obtain permission from the tax administrator if, in calculating taxable profit, the taxpayer was required to apply for permission to use the inventory pricing method used by the entity in preparing the set of financial statements (e.g., FIFO → LIFO). The inventory write-off method used in financial accounting will be used for tax purposes.
An amendment to Article 15 (16) of the Law on Value Added Tax (hereinafter - VAT) entered into force on 29 December 2021, which stipulates those services subject to VAT under Article 13 of the Law on VAT or another Member State's VAT legislation must be deducted when calculating the taxable value of reimported goods.
From 1 January 2022 Article 96 (1) (4) of the Law on VAT on the reverse charge mechanism shall cease to apply in cases where the goods and services are supplied by a taxpayer against which bankruptcy proceedings have been opened and when certain timber is supplied.
The amendment to Articles 36 and 47 of the VAT Law shall enter into force on 1 January 2022. The amendment provides VAT exemption for goods and services procured in Lithuania by the European Commission or bodies and agencies established by the EU institutions or imported into Lithuania for the performance of tasks related to COVID-19 (coronavirus infections) and which will not subsequently be supplied or provided for profit.
Imports of such goods are not subject to VAT, and the supply of goods (or supply of services) is taxed at 0% VAT rate.
Intrastat reports should be provided by those VAT payers whose annual value of dispatches and arrivals of the previous year exceeded the thresholds of submission of Dispatch Intrastat reports and/or Arrival Intrastat reports for the following year. These thresholds are calculated each year for the calendar year and published by the Statistics Lithuania.
Reference Year |
Thresholds of submission of Dispatch Intrastat reports |
Thresholds of submission of Arrival Intrastat reports |
2022 |
200 000 EUR |
280 000 EUR |
The above information is prepared by the Leinonen Lithuania tax team.
If you have any questions, please contact Leinonen Lithuania Tax Team. Our team will be happy to provide more detailed information on the above changes.
Virginija Guleva
Head of Tax & Legal
virginija.guleva@leinonen.lt
Latest articles
2
Apr
1
Mar
2
Feb
We will send you articles keeping you up to date with the latest trends and developments in accounting, taxation or legal fields.