Value added tax and excise duty exemptions

Created: 2014.02.26 / Updated: 2016.07.28 10:20

Purchase of Goods and Services in Lithuania

The value added tax (hereinafter - VAT) and the excise duty exemption is granted in the way of refunding the paid taxes.

The VAT is refunded for the goods and services, where the total value indicated in each invoice is not less than 232 Eur (inclusive of the VAT), whereas the total value for the excise duty refund in each invoice shall be not less than 58 Eur (inclusive of the VAT and excise duty).

The VAT paid for the motor vehicle fuel, communications services, supply of heat, electricity, water, gas, community and operation services shall be refunded irrespective of the price of the acquired goods and/or services. Please note that the VAT and excise duty paid on fuel is refunded only when special cards issued by the fuel vendor in the name of a Mission or privileged person are used for effecting payment. The paid amount of the excise duty should be indicated in the invoice.

Exceptions for the VAT and excise duty refund can be granted on the basis of reciprocity by establishing respectively more or less favourable regime to a foreign diplomatic mission and/or a consular post accredited in Lithuania.

Who are entitled to exemptions:

  1. For the official use:
  • Diplomatic missions and/or consular posts resident in the Republic of Lithuania or in any other EU member state;
  • International organizations recognised by the Republic of Lithuania or their representations, if this is provided under the founding and the host country agreements;
  • European  Union  institutions, the  European  Central  Bank,  the  European  Investment Bank, European Union Agencies, if this is provided under the Agreement between the Government of the Republic of Lithuania and the Commission of the European Communities for the Application of the Protocol on the Privileges and Immunities of the European Communities in the Republic of Lithuania.
  1. For the personal use:
  • Diplomatic and consular agents, administrative-technical staff members and their family members, except service staff members of foreign diplomatic missions and consular posts, provided that the said persons are not nationals or permanent residents of the Republic of Lithuania;
  • Officials of international organizations or their representations enjoying diplomatic status in the territory of the Republic of Lithuania;
  • Heads of European Union agencies and heads of their administrative divisions residing in theRepublic of Lithuania.

The staff of the European Institute for Gender Equality is entitled to reimbursement of VAT on the purchase of personal and household effects, including a motor car for personal use for purchases made during the first year of employment subject to the procedural rules foreseen to the diplomatic missions in Lithuania.

  1. The armed forces of NATO countries other than the Republic of Lithuania or the civilian staff accompanying them when the armed forces take part in joint military operations, exercise or any other joint military event.

Goods and services not covered by the refund regime

The VAT is refunded for all goods and services acquired in Lithuania, except the following articles:

  1. Real estate with the exception of the real estate specified by the Ministry of Foreign Affairs.

In case the real estate on which the VAT has been refunded is sold or in any other way transferred into ownership less than 10 years after its acquisition, the amount of the refunded VAT must be paid into the accumulation account of the Vilnius County State Tax Inspectorate (hereafter - Vilnius CSTI) within 20 working days from its sale or any other transfer into ownership or reduced in the manner established by the central tax administrator (State Tax Inspectorate under the Ministry of Finance) by deducting there from the VAT and/or excise duty amount refundable for the next period.

  1. Land, air, water transport and auxiliary transport installations, except for the means of transport specified by the Ministry of Foreign Affairs.

If the means of transport for which the VAT has been refunded is sold or in any other way transferred into ownership less than 3 years after the day of its acquisition, the amount of the refunded VAT must be paid into the accumulation account of the Vilnius CSTI within 20 working days from its sale or any other transfer into ownership or reduced in the manner established by the central tax administrator by deducting there from the VAT and/or excise duty amount refundable for the next period.

  1. Supply of heat, electricity, water, gas, community and operation services, except in cases when the said services are related with the real estate specified by the Ministry of Foreign Affairs.
  2. Communications services, except for services supplied to diplomatic missions, consular posts, international organizations or their representations as well as to the residences of the Heads of Mission.
  3. Works of art, collector’s items and antiques, as defined by the Law on Value Added Tax of the Republic of Lithuania.
  4. Arms and munitions as well as their parts.
  5. Foodstuffs (non-alcoholic beverages including) as well as services related to the supply of food (non- alcoholic beverages including), provided by restaurants, cafes and other institutions of public catering, except for the foodstuffs (non-alcoholic beverages including) and services related to the organization of receptions on the occasion of the national days of foreign states, the receptions held on the occasion of arrival and departure of the Head of Mission as well as receptions held by the Mission to honour the official guests of the Republic of Lithuania as defined in the Regulations for the Hosting of Official Guests in the Republic of Lithuania, approved by the Government of the Republic of Lithuania by Resolution No.1485 of 27 November 2003 (Official Gazette 2003, No. 113-5077).
  6. Manufactured tobacco as defined in the Law on Excise Duties of the Republic of Lithuania.
  7. Pharmaceutical products, medical equipment and medical services.
  8. Tourism services as defined in the Law on Tourism of the Republic of Lithuania (Official Gazette 1998, No. 32-852; 2002, No. 123-5507), except for the accommodation services provided to the official guest delegations of the Republic of Lithuania as defined in the Regulations for the Reception of Official Guests in the Republic of Lithuania.
  9. Sporting equipment and services related to sporting activities (sports clubs, horse-riding schools, etc.)
  10. Recreational activities (fishing, hunting, tourism and other services, bowling, billiards, darts, etc.)
  11. Passenger transport services.

Procedure of refund

The exemption from the VAT can be requested at the end of the quarter, by the 15th day of the next month. The claim shall be handed in no later than within the year following the one in which the goods and services were acquired.

In order to make an application for the refund, the following documents shall be submitted to the Vilnius CSTI:

  • covering letter,
  • application form (Annex 12).

The application forms and the rules for completing the forms are available on the internet site of the State Tax Inspectorate under the Ministry of Finance www.vmi.lt.

If goods or services were acquired for the official use, the application forms have to be sealed and signed by the Head of Mission or a person authorised by the Head of Mission. If the goods or services were intended for private use – a member of the Mission himself/herself shall sign the application and the Head of Mission or an authorised person shall approve it by signing and sealing.

In case refund for the fuel is requested, the report on fuel acquisition for the period claimed shall be enclosed,

If refund for goods and services listed above in the paragraphs 2, 7 and 10 of the chapter "Goods and services which are not covered by the refund regime" is requested, confirmation of the Ministry of Foreign Affairs for the eligibility to refund shall be enclosed.

The Mission, wishing to recover the VAT for the goods and services for which the specification of the Ministry of Foreign Affairs is required, shall indicate in its Verbal Note to the Ministry of Foreign Affairs:

  • for the means of transport - the type and model of the vehicle acquired as well as the date of its acquisition and the number of the relevant invoice. The refund is granted after having registered the vehicle at the SE Regitra;
  • for the National Day receptions, receptions on arrival and departure of the Head of Mission, receptions to honor the official guests of the Republic of Lithuania - the particular occasion, the date and the number of the relevant invoice.
  • for accommodation services provided to the delegations of the official quests of the Republic of Lithuania - the date of the visit and the number of the relevant invoice in the covering note.
Note: Failure to observe the correct procedure can cause serious delays in refunding the VAT and excise duties. The claim might be refused if the quantities of acquired goods and services are in excess of reasonable needs or there are grounds to believe that they are intended not for a Mission’s or a privileged person’s use.

Purchase of Goods and Services in Other EU Member States

The Mission or a member of the Mission are entitled to VAT exemptions when acquire goods and services in the other EU member state, provided that the goods and services are qualified for the VAT refund in Lithuania. Two copies of VAT and Excise Duty Exemption Certificate (Annex 8) shall be completed for each supplier/warehousekeeper and sent to the Protocol Department for the validation. The order forms for goods and services attached to the Certificate shall be translated into the Lithuanian language.

Within 5 working days from the day of the receipt of the Certificate the Protocol Department verifies whether the goods and services meet the conditions for exemption from the VAT and/or excise duty totally or up to a certain amount. An approved document is returned to the Mission.

Legislation:

  1. 2004 m. balandžio 16 d. Lietuvos Respublikos Vyriausybės nutarimas Nr. 442 “Dėl pridėtinės vertės mokesčio ir akcizų lengvatų taikymo prekėms ir paslaugoms, skirtoms diplomatinėms atstovybėms, konsulinėms įstaigoms ir tarptautinėms organizacijoms ar jų atstovybėms, taip pat šių atstovybių ir įstaigų nariams ir jų šeimų nariams bei Šiaurės Atlanto sutarties organizacijos šalių kariuomenių vienetams ir (arba) juos lydintiems civiliams darbuotojams, taisyklių patvirtinimo” (Žin., 2004, Nr. 58-2052) (aktuali redakcija);
  2. 2002 m. birželio 21 d. Lietuvos Respublikos finansų ministro įsakymas Nr. 188 "Dėl palankesnės arba nepalankesnės pridėtinės vertės mokesčio ir akcizų grąžinimo užsienio valstybės diplomatinei atstovybei arba konsulinei įstaigai tvarkos patvirtinimo" (Žin., 2002, Nr. 65-2686; 2013, Nr. 67 -3358, www.finmin.lt);
  3. 2004 m. liepos 5 d. Valstybinės mokesčių inspekcijos prie Lietuvos Respublikos Finansų ministerijos viršininko įsakymas Nr. VA-126 “Dėl pridėtinės vertės mokesčio ir akcizų grąžinimo Lietuvos Respublikoje įsikūrusioms diplomatinėms atstovybėms, konsulinėms įstaigoms ir tarptautinėms organizacijoms ar jų atstovybėms, taip pat šių atstovybių, įstaigų ir organizacijų nariams ir jų šeimų nariams bei Šiaurės Atlanto sutarties organizacijos šalių kariuomenių vienetams ir (arba) juos lydintiems civiliams darbuotojams”(Žin., 2004, Nr. 105-3922; 2012, Nr.63-3209).

Exemption from Taxes and Duties on Imported Goods

Exemption from taxes and duties is granted to imported goods constituting diplomatic freight, the sender and the receiver of which is the Mission or a member of the Mission accredited to Lithuania. This also applies to the diplomatic freight in transit through the territory of Lithuania, the sender and the receiver of which is the Mission or a member of the Mission in the third country. The imported goods free of customs duties and taxes shall be intended for the official use of the Mission or constitute personal belongings of a member of the Mission during the period of his/her accreditation.

No letter of confirmation of the Protocol Department to the customs is required.

The staff of the European Institute for Gender Equality is entitled to import personal and household effects and a motor car for personal use free of charge and exempt from customs duties, prohibitions and restrictions, within their first year of taking up post in Lithuania and re-export free of duty on termination of their duties in Lithuania.

Note: The diplomatic freight shall bear a clear label and must be accompanied by an official certificate indicating the number of packages constituting the diplomatic freight. It must be noted that the clearance of certain goods or articles requires specific procedures to be followed. These procedures are described under the paragraph Specific Export Procedures.

Import of Alcoholic Beverages and Tobacco Products

Alcoholic beverages and tobacco products brought from the third countries are exempted from import duties and taxes if they are transported as diplomatic freight and designated exclusively for the official use of the Mission or personal use of a member of the diplomatic or administrative-technical staff of the Mission during the period of his/her accreditation.

No letter of confirmation of the Protocol Department to the customs is required.

Import of Vehicles

Vehicles brought from the third countries are exempted from import duties and taxes if they are designated for the official use of the Mission or for the personal use of a member of the Mission (except members of the service staff).

If the vehicle which was exempted from import duties and taxes is sold or in any other way transferred into ownership less than 3 years after the day of the accomplishment of customs formalities, the import duties and taxes must be paid to the territorial customs office within 10 working days from its sale or any other transfer into ownership.

Legislation:

  1. 2007 m. rugpjūčio 14 d. Lietuvos Respublikos Vyriausybės nutarimas Nr. 808 „Dėl importo muitų ir kitų mokesčių lengvatų įvežtoms transporto priemonėms, skirtoms naudoti užsienio valstybių diplomatinėse atstovybėse, konsulinėse įstaigose ir tarptautinių organizacijų atstovybėse, taip pat Šiaurės Atlanto sutarties organizacijos valstybių kariuomenių vienetuose, taikymo tvarkos“ (Žin., 2007, Nr. 90-3577).

Exemption from Income Tax

Members of the Missions are exempted from the Lithuanian income taxes. Honorary consular officers are exempted only from the Lithuanian income taxes in relation to earnings received by reason of their consular function.

Specific Export Procedures

In order to export articles of cultural heritage and antiques purchased in Lithuania, members of the Missions shall make sure that they have obtained the permission of the Department of Protection of Cultural Heritage under the Ministry of Culture. The Protocol Department advises to request the permission well in advance, as the procedure of issuing the permission may take up to 30 days.

The following documents shall be submitted to the Department of Protection of Cultural Heritage:

  • an application including the catalogue data of the article of cultural heritage or the antique (author, name, material, technique of execution, dimensions and weight, year of creation);
  • the article of cultural heritage to be exported;
  • two or three photos of each article of cultural heritage or antique (9x13 or 13x18 cm in size) depending whether the article is exported to the EU or outside the EU territory;
  • other necessary documents (in order to export earlier imported articles of cultural heritage or antiques, customs declaration approving the import of these articles shall also be submitted).

The permit is valid for one year from the date of its issuance. Upon export of articles of cultural heritage or antiques, the article itself, the permit of the Department of Protection of Cultural Heritage and a photo of the article shall be presented to the customs. The article to be exported shall be declared at the customs in written form.

In case of export of works of modern fine arts and applied arts (except for the works containing amber) not older than 50 years purchased in art galleries or shops, a permit of the Department of Protection of Cultural Heritage is not required if the art gallery or shop issues a document specifying the following catalogue data of the art work (author, name, material, technique of execution, dimensions of weight, year of creation) and a purchase-sale document, which shall be produced to the customs upon the export of the article.

All questions concerning the list of articles of cultural heritage and antiques which need export permits or the procedures involved shall be addressed to the Department of Protection of Cultural Heritage under the Ministry of Culture.

Legislation:

  1. 2004 m. lapkričio 9 d. Lietuvos Respublikos Vyriausybės nutarimas Nr. 1424 “Dėl kilnojamųjų kultūros vertybių ir antikvarinių daiktų išvežimo iš Lietuvos Respublikos taisyklių ir kilnojamųjų kultūros vertybių ir antikvarinių daiktų, kuriuos išvežant iš Lietuvos Respublikos būtina turėti Kultūros vertybių apsaugos departamento prie Kultūros ministerijos leidimą, sąrašo patvirtinimo” (Žin., 2004, Nr. 165-6031) (aktuali redakcija)

Taxpayer Identification Number

The newly opened Mission shall apply for registration in the Lithuanian Register of Taxpayers. In order to perform its activities in the Republic of Lithuania, the Mission will be provided with the taxpayer's identification number.

The duly filled application form REG 806 shall be submitted to the Vilnius County State Tax Inspectorate. In case the registration data (the address, the telecommunication details, the name of authorised person, etc.) have changed or the Mission stops its activities, the application form has to be completed once again.

Information on the procedure of registration of Mission in the Register of Taxpayers and removal from it as well as clarification of completing and submitting the application form could be found on the internet site of the State Tax Inspectorate under the Ministry of Finance.

The Mission shall inform the Protocol Department about the taxpayer's ID number assigned and the date of registering by a Verbal Note.

Legislation:

  1. 2008 m. gruodžio 1 d. Valstybinės mokesčių inspekcijos prie Lietuvos Respublikos Finansų ministerijos viršininko įsakymas Nr. VA-60 „Diplomatinių atstovybių, konsulinių įstaigų, tarptautinių organizacijų arba jų atstovybių įregistravimo Mokesčių mokėtojų registre/išregistravimo iš Mokesčių mokėtojų registro“ (Žin., 2008, Nr. 142-5681)