Our tax advisors have noticed that companies registering for the value-added taxpayer (further - VAT)
register in Lithuania are facing difficulties as a result of which the
registration process may be declined or significantly lengthened. Below we
provide several main criteria that should be considered before registering for
VAT in Lithuania.
- The taxable person's intended activity. We would like to point out that there are cases when a person
registering for VAT does not perform any economic activity for more than
three months, respectively, such a person can be de-registered from the VAT
register at the initiative of the Lithuanian tax administrator. Before
applying for VAT registration we recommend that you assess when the person
intends to start operating.
- Existing/expected suppliers/customers.
A very frequently asked question by the Lithuanian tax administrator
during the VAT registration process, accordingly, it should be assessed
whether the person registering for VAT will be able to indicate
existing/expected suppliers/customers and provide contracts with them.
- Place of activity. It should be assessed whether
the person who is registering for VAT will be able to indicate the place
of activity (address), submit documents proving the ownership of the place
of activity or a lease agreement. If the activity is carried out remotely
the TA must also be informed about it.
- Existing/expected transaction, naming specific suppliers and
customers, contract object and value.
During VAT registration, the person will have to provide information about
the nearest expected transaction, accordingly, it should be assessed
whether the nearest transaction is known, as well as whether the person
will be able to provide other necessary information such as specify
providers/customers, submit contracts, invoices.
- A person responsible for the accounting of the Company. During the VAT registration, the person will have to provide
information and indicate the natural person or company responsible for the
accounting of the Company, if this information has not been provided yet.
- Bank account. It should be assessed whether
the person who registers for VAT has an account in the bank and can
provide information regarding this account (account no., date when the
account was opened, in which bank, etc.)
- Information about employees.
During the VAT registration, a person will have to provide information
about employees i.e. what is the planned number of employees, whether
employment contracts have been concluded (if not, when are they planned to
be concluded), what is the planned average salary of employees, or the
employment contract concluded with the head of the legal entity.
If you have any
questions, please do not hesitate to contact the Leinonen Tax team