Lithuania

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Personal scope of application As per 26 June 2022

Are there any deviations from the Directive in defining the intermediary?

2021/06/17

There are no deviations from the Directive.

How is an intermediary defined? Is there a differentiation between a corporate entity and an individual person?

2021/06/17

There are no differences.

Can a corporate tax department (or its members) within a MNE or within a group of entities qualify as an intermediary?

2021/06/17

In case individual person (employed by an entity) performs an action on behalf of the entity (i.e. employer) that falls under the definition of „intermediary“, the entity would be considered as an intermediary.In case there is no intermediary involved (as defined in the Directive), the reporting obligation in respect of a reportable cross-border arrangement lies with the relevant taxpayer).

How are the actions of designing, marketing, organizing, making available for implementation or managing the implementation of a tax arrangement defined?

2021/06/17

These actions are not defined.

Have the legal preconditions regarding the territorial nexus for an intermediary been implemented in accordance with the Directive?

2021/06/17

There are no deviations from the Directive.

Are there any other conditions apart from those of the Directive, such as the territorial nexus of a tax arrangement to a certain Member State, which trigger a reporting obligation of an intermediary (e.g. including intermediaries from outside the EU)?

2021/06/17

There are no deviations from the Directive.

In which cases is the relevant taxpayer obliged to report? Are there deviations from the Directive?

2021/06/17

There are no deviations from the Directive.

Are there any other persons beside intermediaries or relevant taxpayers obliged to report?

2021/06/17

There are no deviations from the Directive.

Are there any deviations from the Directive in defining the relevant taxpayer?

2021/06/17

There are no deviations from the Directive.

Mechanism to avoid multiple reporting

Which measures have been taken to avoid multiple reporting obligations referring to an intermediary obliged to report in several countries? Are there deviations from the Directive?

2021/06/17

There are no deviations from the Directive.If there are multiple reporting obligations, the intermediary shall be exempt from filing the information if it has proof, in accordance with national law, that the same information has been filed in another Member State.

Which measures have been taken to avoid multiple reporting obligations referring to more than one intermediary obliged to report? Are there deviations from the Directive?

2021/06/17

There are no deviations from the Directive.An intermediary shall be exempt from filing the information only to the extent that it has proof, in accordance with national law, that the same information has already been filed by another intermediary.

Which measures have been taken to avoid multiple reporting obligations referring to a relevant taxpayer obliged to report several countries? Are there deviations from the Directive?

2021/06/17

There are no deviations from the Directive.If there are multiple reporting obligations, the relevant taxpayer shall be exempt from filing the information if it has proof, in accordance with national law, that the same information has been filed in another Member State.

Which measures have been taken to avoid multiple reporting obligations referring to more than one relevant taxpayer obliged to report? Are there deviations from the Directive?

2021/06/17

There are no deviations from the Directive.Any relevant taxpayer shall only be exempt from filing the information to the extent that it has proof, in accordance with national law, that the same information has already been filed by another relevant taxpayer.

How does the National Tax Authority expect the conditions for exemption from filing a report to be met?

2021/06/17

The intermediary or relevant taxpayer can prove the exemption by referring the number of the tax arrangement assigned by the competent authority.

Material scope of application

Are national tax arrangements subject to reporting under the Directive?

2021/06/17

National tax arrangements are not subject to report.

Which taxes are affected? Are there deviations from the Directive?

2021/06/17

There are no deviations from the Directive.

Does the hallmark catalogue deviate from the Directive? If yes, to what extent?

2021/06/17

There are no deviations from the Directive.

Which hallmarks are linked with the main benefit test?

2021/06/17

There are no deviations from the Directive.

How is the main benefit test defined?

2021/06/17

The main benefit test will be satisfied if it can be established that the main benefit or one of the main benefits which, having regard to all relevant facts and circumstances, a person may reasonably expect to derive from an arrangement is the obtaining of a tax advantage.

How is a tax advantage defined?

2021/06/17

There is no definition of a tax advantage provided in the Order. However, following the provisions of the Lithuanian Law on Tax Administration, the tax advantage is defined as the deferral of the deadline for tax payment, reduction of the payable tax amount, avoidance of payable tax, an increase of tax overpayment, etc.

Are there any deviations from the Directive in defining a cross-border arrangement?

2021/06/17

There are no deviations from the Directive.

Is there a white list defining arrangements explicitly excluded from a reporting obligation? If yes, please provide details.

2021/06/17

There is no white list defining arrangements explicitly excluded from a reporting obligation.

Are there any deviations from the Directive in defining associated enterprises?

2021/06/17

There are no deviations from the Directive.

Reporting process

When is a cross border arrangement made available for implementation (e.g. handover of contract documents)?

2021/06/17

It is considered that conditions for implementation tax arrangement are in place or tax arrangement is ready for implementation when tax arrangement is sufficiently well designed, developed, considered and a decision to implement the tax arrangement can be taken.For tax arrangement to be considered as reportable, which is made available for implementation, it is not necessary to provide detailed information on the agreement to the taxpayer concerned, if the substance of tax arrangement could be understood from the proposal. If a reportable tax arrangement has been prepared and offered to the taxpayer concerned but the taxpayer has refused to implement it, the reportable tax arrangement shall be deemed to have been submitted for implementation and the obligation to report such arrangement arise to the intermediary.

When is a cross-border arrangement ready for implementation?

2021/06/17

It is considered that conditions for implementation tax arrangement are in place or tax arrangement is ready for implementation when tax arrangement is sufficiently well designed, developed, considered and a decision to implement the tax arrangement can be taken.For tax arrangement to be considered as reportable, which is made available for implementation, it is not necessary to provide detailed information on the agreement to the taxpayer concerned, if the substance of tax arrangement could be understood from the proposal. If a reportable tax arrangement has been prepared and offered to the taxpayer concerned but the taxpayer has refused to implement it, the reportable tax arrangement shall be deemed to have been submitted for implementation and the obligation to report such arrangement arise to the intermediary.

When has the first step in the implementation of a cross-border arrangement been made?

2021/06/17

The first step in the implementation of a tax arrangement is the first change in the factual or legal status resulting from the reportable tax arrangement, given which occurs first. The first step in the implementation of a reportable tax arrangement may include the establishment of a legal entity, the signing of the agreement, the decision of the management board to approve the prepared reportable tax arrangement.

Which information should be included in the report? Are there deviations from the Directive?

2021/06/17

There are no deviations from the Directive.

What does the reporting process look like? Are there deviations from the Directive?

2021/06/17

Online reporting, data should be submitted under the form of xml file.

Is the entire report to be provided by the intermediary/relevant taxpayer? Who must provide the report?

2021/06/17

Intermediary as well as the relevant taxpayer can be obliged to provide the report.

What are the respective deadlines for the intermediary and the relevant taxpayer to file the report? Are there deviations from the Directive in terms of filing the information within 30 days?

2021/06/17

There are no deviations from the Directive.

Which numbers are assigned by local tax authorities to the cross-border arrangements?

2021/06/17

The number of reportable cross-border arrangement – the number which is assigned by the Lithuanian Tax Authorities to the intermediary or relevant taxpayer, when he submit information on such arrangement for the first time.

What is the reporting deadline for arrangements the first step of which was implemented between 25 June 2018 and 30 June 2020?

2021/06/17

28 February 2021.

When is the reporting deadline for arrangements for which the event triggering the reporting obligation lies between 1 July 2020 and 31 December 2020?

2021/06/17

The start date of the 30-day reporting deadline is 1 January 2021.

When is the reporting deadline for arrangements for which the event triggering the reporting obligation lies after 1 January 2021?

2021/06/17

There is no specific guidance, a general deadline of 30 days from the relevant reporting trigger shall be applied.

Penalties

In which cases are penalties imposed?

2021/06/17

Sanctions are imposed in case of:- omission to report;- breach of reporting obligation (e.g. lack of reporting, late reporting, incomplete reporting, etc.).It should be noted that each violation is assessed by the Tax Authorities individually.

What are the penalties?

2021/06/17

Administration fine from EUR 1,820 to EUR 5,590;Administration fine for repeated violations from EUR 3,770 to EUR 6,000.

Is a distinction made between penalties imposed on intermediaries/relevant taxpayers/other persons obliged to report?

2021/06/17

No distinction is made between intermediaries and relevant taxpayers.

What are the penalties in case of redundant reports? A redundant report is a report, which was filed, although there is no obligation to file one.

2021/06/17

This case is not specifically mentioned in the Lithuanian law. Therefore, there are no sanctions for redundant reports.

Do the penalties differ with regard to incomplete, incorrect, missing or late reports? Are there any gradations?

2021/06/17

The local law does not specify any gradations for different breaches of the reporting obligation. Determining the sanction is at the discretion of the Tax Authorities.

Are arrangements the first step of which was implemented between 25 June 2018 and 30 June 2020 treated differently in the means of penalties?

2021/06/17

The penalties do not differ.

Other aspects

Do already other reporting regimes on cross-border arrangements exist?

2021/06/17

DAC 1, DAC 2, DAC 3, DAC4, DAC 5 implemented into the Lithuanian legislation.

Are there any other special deviations from the Directive? 

2021/06/17

There are no other deviations from the Directive.

What is the name of the national Tax Authority responsible for DAC6?

2021/06/17

State Tax Inspectorate under the Ministry of Finance of the Republic of Lithuania.

Do any other obligations apart from reporting a reportable cross-border arrangement exist under the national DAC6 legislation? (i.e. indication of the arrangement in the tax return)

2021/06/17

There are no other obligations.

Professional privilege/secrecy

Who is primarily obliged to report? Is there a primary reporting obligation of the intermediary or the relevant taxpayer? Is there legal privilege and in how far has it been considered for allocating the reporting obligation?

2021/06/17

The intermediary is primarily obliged to report. The taxpayer is obliged to report in the following cases:- there is no intermediary;- intermediary is subject to a legal professional privilege under Lithuanian law.The intermediary could be waived from his reporting obligation if the reporting obligation would breach the legal professional privilege under Lithuanian legislation. If the intermediary notifies the relevant taxpayer or another intermediary of a waiver, the reporting obligation lies with the other notified intermediary, or if there is no such intermediary, with the relevant taxpayer.

Does the reporting obligation breach a legal professional privilege under national law?

2021/06/17

Yes.

Does the national law make reference to professional privilege or professional secrecy?

2021/06/17

Professional secrecy is defined in the Lithuanian Civil Code.

What is the difference, as per the national law, between professional privilege and professional secrecy?

2021/06/17

There is no guidance.

To which categories of intermediaries does the professional privilege or professional secrecy apply?

2021/06/17

Following the written comments related to the implementation of the Directive prepared by the Tax Authorities, the professional privilege could be applied to the lawyers.

In the context of the reporting obligation, under which conditions are the intermediaries entitled/obliged to make use of professional privilege or professional secrecy?

2021/06/17

The reporting obligation could be in breach of the legal professional privilege under Lithuanian legislation (no regulatory definition yet). Also, such an intermediary is obliged to inform another intermediary or taxpayer that he will use a legal privilege. Hence, the reporting obligation lies with the other notified intermediary, or if there is no such intermediary, with the relevant taxpayer.

In cases in which professional privilege or secrecy applies, please describe the procedure for notification.

2021/06/17

Regulation of the procedure for notification has not been established yet.

Does the national law provide specific conditions to waive professional privilege or professional secrecy?

2021/06/17

No.

Jurate Zarankiene
Managing Partner