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Jan 21, 2013 ... December 2012 and Letter No KD-7870 issued by the Tax Authorities on 3 ... Art. 80 of the VAT Law and new Art. 78-1 that came into force on 1 January ..... A new system called “e. statistika” has replaced previous statistical ...
Issue No. 158 ▪ 21 January 2013

Contacts Kristina Kriščiūnaitė Partner, Head of Tax & Legal Services E-mail: [email protected] Tel: +370 5 239 23 00 Nerijus Nedzinskas E-mail: [email protected] Tel.: +370 5 239 23 50 Daiva Šoliūnaitė E-mail: [email protected] Tel.: +370 5 239 23 09 Aušra Miltenytė E-mail: [email protected] Tel.: +370 5 239 23 71

PricewaterhouseCoopers, UAB J. Jasinskio 16B, Vilnius Tel: +370 5 239 23 00 www.pwc.com/lt

The Tax & Legal Alert is produced by PwC Lithuania Tax & Legal Services

Tax & Legal Alert January 2013

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Accounting News

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Tax & Legal Alert provides the latest information on changes in Lithuanian legislation most urgent to our clients. In this issue: 

Value Added Tax news



Customs News



Excise Duties News



Corporate Income Tax news



General Information



Accounting News



Legal News



Tax Case-Law

Value Added Tax (VAT) Amendments to the VAT Law The application of reduced VAT rates for heating energy and medicine compensated by the State is prolonged until 31 December 2013. The reduced VAT rate of 9% on periodical publications meeting certain criteria and domestic public transport services and the reduced VAT rate of 5% on technical aid devices and their repair services for the disabled came into force on 1 January 2013. Moreover, the requirement stating that import VAT must be actually paid before including it into VAT deduction is abolished (amendment to Art. 65 Part 5 of the VAT Law). Following the case law European Union Court of Justice, the amendments to the VAT Law state that taxable persons who are not registered for VAT purposes, however, acquire goods/services to perform VAT taxable activities are entitled to VAT deduction (amendment to Art. 57, Art. 92 Part 3 and supplement with Art. 63-1). Determination of the place of supply long-term rent of vehicles rendered to non-taxable persons is also amended. Starting from 1 January 2013, pleasure boat rent services are subject to VAT in Lithuania, if

such a boat is transferred to a customer within the territory of Lithuania. Rent services of other vehicles are considered supplied in Lithuania, if a customer is established in Lithuania (amendment to Art. 13 Part 13 of the VAT Law). Amendment to the VAT Law No XII-78 adopted by the Parliament of Republic of Lithuania on 20 December 2012 and Letter No KD-7870 issued by the Tax Authorities on 3 January 2013.

Amendments to invoicing Orders of the Minister of Finance concerning rules on implementation of Art. 79 and Art. 82 of the VAT Law were abolished from 1 January 2013. Order No VA-82 issued on 30 April 2004 by the Head of the Tax Authorities concerning usage of electronic invoices and Order No VA-51 issued on 9 April 2004 concerning the agreement on self-billing were also abolished from 1 January 2013. For the purpose of issuing invoices amended provisions of Art. 79 and Art. 80 of the VAT Law and new Art. 78-1 that came into force on 1 January 2013 and the provisions of the rules on issuing accounting documents used for calculation and recognition of taxes should be followed. Order No 1K-434 of the Minister of Finance adopted on 19 December 2012, Order No VA-110 adopted on 11 December 2012 and Order No VA-113 adopted on 14 December 2012 by the Head of the Tax Authorities. PwC 2

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Amendments to the official Commentary on the VAT Law concerning continuous supply of services and obligations to calculate VAT for supply of goods to a Member State The official Commentary on the Art. 14 Part 6 of the VAT Law was supplemented with updated practical examples. The official Commentary on the Art.14 Part 10 of the VAT Law was amended according to the amendment of the new wording of Art. 14 Part 10 that came into force on 1 January 2013. Letter No (32.43-31-2)-RM-7061 issued by the Tax Authorities on 19 December 2012.

VAT refund form for foreign passengers and rules on its completion were amended The new wording of VAT refund form for foreign passengers FR0420 and its completion rules was introduced. The amendments were made according to amended provisions on VAT refund for foreign passengers No 1031 adopted by the Government of Lithuania on 29 August 2012. Order No VA-118 of the Tax Authorities adopted on 27 December 2012.

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Customs News

Excise Duties

Amendment to the rules on completion of Intrastat declaration

Excise duties on cigarettes and diesel fuel are increased

Amendment to the rules on completion, submission and acceptance of declarations for trade between Lithuanian VAT payers and the EU member states establishes that starting from 1 January 2013 Box 8 (“Country of receiver”) of the Intrastat dispatch declaration must be completed in line with Regulation No 1106/2012 adopted by the European Commission on 27 November 2012 that replaced Regulation No 1833/2006 adopted by the Commission on 13 December 2006. Regulation introduces the amended nomenclature of countries and territories.

The following excise duties rates are amended starting from 1 January 2013:

Single Order No DĮ-258/1B-953 of the Head of Department of Statistics of Lithuania and the Head of Customs Department adopted on 18 December 2012.

Updated manual “Prices of vehicles in Lithuania” The Customs Department allowed to apply prices indicated in manual “Prices of vehicle in Lithuania”, issued in January 2013, prepared by public entity “Emprekis” when estimating the customs value of vehicles and for customs valuation control purposes. Order No 1B-965 of the Head of the Customs Department adopted on 21 December 2012.



the specific tax rate element for cigarettes that applies on 1,000 cigarettes is increased from LTL 140 to LTL 148 and the minimal threshold of the combined rate is increased from LTL 232 to LTL 244 for 1,000 cigarettes;



cigars and cigarillos – from LTL 84 to LTL 88 per kilo;



diesel fuel – from LTL 1,043 to LTL 1,140 per 1,000 litres of the product.

Amendment to the Law on Excise Duties No XII-80 adopted by the Parliament of Republic of Lithuania on 20 December 2012.

Amendment to the rules on ordering and issuing duty stamps The amendments to the rules on ordering and issuing duty stamps for manufactured tobacco, ethyl alcohol and alcoholic beverages include: 

provision that entities are required to use Excise Information System of the Tax Authorities when placing orders to produce duty stamps for manufactured tobacco, ethyl alcohol and alcoholic beverages; PwC 3

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the revised term of used duty stamps;

Corporate Income Tax (CIT)



the new wording to forms of application to produce and issue of duty stamps;

Regarding the use of sponsorship



updated forms for return, usage and disposal of duty stamps;



the new wording to duty stamps codes for manufactured tobacco, ethyl alcohol and alcoholic beverages.

Order No VA-109 adopted by the Head of the Tax Authorities on 7 December 2012 and Letter No (32.43-31-2)-RM-7129 issued by the Tax Authorities on 20 December 2012.

Supplement to the rules on accounting of goods that are subject to excise duties The classification of tariff codes groups that is included in the rules on accounting of goods that are subject to excise duties that should be followed by owners of warehouses of goods that are subject to excise duties, temporarily registered consignees and registered consignors was supplemented with tariff codes of leaded gasoline additives, unleaded gasoline additives and diesel fuel additives. Order No VA-117 of the Tax Authorities adopted on 21 December 2012.

The Commentary on the Law on CIT has been supplemented regarding the use of sponsorship. If the costs incurred by a recipient of sponsorship on making information about a provider publicly available exceeds 10% of the value of sponsorship, the exceeding amount is recognized as a sponsorship used not for its purpose. This provision came in force on 1 January 2013. The sponsorship received by a non-profit entity is not recognized as its economic and commercial income. The recipient of sponsorship may use it for the purposes of public benefit and for charity if the company has a right to provide it.

Please note that from 1 January 2013 sponsorship is voluntary and gratuitous except for certain obligations that the recipient of sponsorship may undertake which are as follows: 

make information about the provider publicly available;



deliver reports about the use of sponsorship and the activity of the recipient to the provider;



use sponsorship for its purpose.

Obligations for the provider should be determined in the agreement and cannot object the provisions which describe the use of sponsorship. It may also be established that the sponsorship will be used to form endowment of a charity and sponsorship fund. Letter No. (32.42-31-1)-RM-6912 issued by the Tax Authorities on 13 December 2012.

Sponsorship is recognized as used for its purpose if the sponsorship is used to form and manage endowments and if the income from invested endowments is used for the purposes of public benefit.

Regarding tax losses carried forward

If the status of the recipient of sponsorship is revoked, the sponsorship that has not been used is attributed to taxable income of the period when the status was revoked.

Carrying losses forward should be terminated when a company stops performing the activity which formed these losses unless the activity has been terminated because of the circumstances not dependent on the company (e.g. force majeure). The losses of the terminated activities may be covered with a profit of the other activities of the same tax period.

The Commentary on the Law on CIT has been supplemented according to the changes of the Law on CIT in 2008 regarding losses carried forward.

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If after covering the losses of the terminated activity of the tax period with the profit of the other activities the profit remains, it can be used to cover the losses from the previous tax periods of the terminated activities. However if those losses are not fully covered they cannot be carried forward. If the losses of the terminated activities exceed the profit of the other activities and therefore the losses for the tax period are formed, the part of the losses that exceeds the profit and the losses of the terminated activities of the previous tax periods cannot be carried forward to the future tax periods. In case of reorganisation, when a company or a part of its activities is being transferred, carrying losses of the activities transferred should be stopped as the entity is not performing those activities anymore. In this case the losses from the previous tax periods may be carried forward in the same order as if the activities are being transferred. If the losses are being transferred together with the company (and the transfer of losses is established in the transfer and acceptance agreement), the order of carrying losses forward in case of reorganisation should be applied (Art. 43 of the Law on CIT). The Commentary has been supplemented with an explanation that losses incurred as a result of transferring the shares of an entity when shares are transferred to the issuer or when they are annulled cannot be deducted from the income. Letter No. (32.42-31-1)-RM-6814 issued by the Tax Authorities on 10 December 2012.

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Comment of Daiva Šoliūnaitė, PwC Manager The Commentary on Art. 30 of the Law on CIT states that losses of the terminated activity incurred during current or previous tax periods can be used (i.e. deducted from profit) during the tax period when the activity is terminated. The project of the Commentary of the Art. 30 prepared by the tax Authorities in July 2012 did not include this provision. However there was a contrary statement which explained that the losses of the terminated activity should not be deducted when calculating taxable profit starting with the period when the activity was terminated. If this project of the Commentary would have been approved, a company when terminating any of the activities should have had to tax the profit of that activity incurred during the tax period but would not have used the losses of the activity. This would have limited the freedom of the company to make decisions and encouraged cheating in order to carry losses forward – companies could have prolonged the period of performing the activity until the end of the next year. We are happy that the Tax Authorities took our comments into account and adjusted the Commentary on Art. 30 and 43 without distorting the provisions of the Law on CIT and provided more favorable explanation to the tax payers.

The Commentary regarding the cases of reorganisation and transfer was updated The main changes of the Commentary are as follows: When the acquiring company transfers its shares issued in exchange for the shares of the acquired company the following conditions shall be met: 

The acquiring company obtains complete control over the acquired company, i.e. obtains the shares conferring of ½ or more of the voting rights;



The shareholders of the acquired company in exchange receive the shares in the acquiring company.

When the company without being dissolved transfers one or more parts of its assets, rights and liabilities to one or more new companies in proportion to the number of shares left in the transferring company and transferred to the new companies, the difference in the price of the shares exchange cannot be covered in cash. The previous provision of the Commentary which did not require that all members of the acquired company should get shares of the acquiring company was abolished. Only the example illustrating this statement is left in the updated version of the Commentary. The Commentary also states that in case of separating an activity from a transferred company PwC 5

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and when a new company is established on the basis of separated activity, members of the transferred company should get shares of a new company in exchange of the eliminated shares of the transferred company and should reduce its authorized capital. A part of liabilities may be transferred to the acquiring company not in the proportion to the asset transferred if such a division is economically substantiated (for example, the net value of the assets of the transferred company can be accurately determined). The Commentary was also adjusted regarding the changes of the CIT rates in 2008, 2009 and 2010. Letter No. (32.42-31-1)-RM-7062 issued by the Tax Authorities on 19 December 2012.

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Comment of PwC The provision of the Commentary stating that the members of a transferred company should annul their part of the shares and reduce the authorized capital in exchange for shares of a new company is opposite to the Law on CIT, which requires neither to annul the part of the shares of the transferred company nor to reduce the authorized capital. According to the Law on CIT the equity (which is not the same as the authorized capital) should be proportionally separated. In our opinion, the Commentary unreasonably limits and narrows down the cases of separation and discriminates those companies which have minimum authorized capital although the Law on CIT does not include such provisions.

Publication CIT exemptions was introduced The Tax Authorities issued publication CIT exemptions containing a detailed review of currently applicable CIT exemptions and tax law provisions related thereto. Letter No. (32.42-31-1)-RM-6747 issued by the Tax Authorities on 6 December 2012.

Personal Income Tax and Social Insurance Tax The Commentary on income from distributed profits updated The Commentary on Article 12 of the Law on PIT highlights that income derived by owners of private companies and members of small partnerships which is not treated as employment related income should be treated as dividends. The Commentary also provides a new example that income derived from the reduction of the authorised capital is subject to PIT at the rate of 15%, if the authorised capital had been increased in case of reorganisation, as provided in the Law on CIT, when the capital was not increased from profit but the owned shares were exchanged to the newly issued ones of the company whose authorised capital was increased. Moreover, the Commentary on Article 5 of the Law on PIT provides the explanation on the allocation of income derived by Lithuanian non-residents owners of private companies and members of small partnerships - to income classes. Letters No (32.42-31)-1-RM-6669 and No (32.4231)-1-RM-6670 issued by the Tax Authorities on 3 December 2012.

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Updated rules for completing form GPM308 The amendments of the rules for completing the annual personal income tax return form are related to the declaration of income derived under business certificates, in cases when the amount of income received by individuals performing activities under business certificates from legal entities exceeds LTL 15,500 per year or when individuals have to register (are registered) as VAT payers. Besides the above, the amended rules explain how to declare income received from the lease of residential premises, if individuals having a business certificate for such an activity have to register as VAT payers (such income has to be included in appendix GPM308P). Letter No (32-42-31-1)-RM-6875 issued by the Tax Authorities on 12 December 2012.

Supplemented rules for completing form FR0573 The rules for completing the annual tax return form FR0573 were supplemented with new income type codes – these changes are related to income received by owners of private companies, real members of partnerships or members of small partnerships. Moreover, the list of income types related to interest paid has also been expanded. Separate income type codes will have to be used for declaring interest paid for deposits, securities, loans, etc.

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Letter No (32.42-31)-1-RM-7170 issued by the Tax Authorities on 21 December 2012.

Amended rules for completing the asset return Rules for completing the form FR0001 were amended due to the Law on the Amendment of the Law on the Declaration of Assets of Residents No XI-2283. This law introduces the obligation to declare assets for such groups of individuals as the heads of state or municipality institutions, the heads of divisions of such institutions, candidates to such positions, etc. Letter No (32.42-31)-1-RM-7172 issued by the Tax Authorities on 21 December 2012.

Taxation of income derived from sports activities The Tax Authorities provided explanations as a reminder related to the taxation and declaration order of payments made to sportsmen – Lithuanian residents and non-residents. Letter No (32.42-31)-1-RM-7195 issued by the Tax Authorities on 27 December 2012.

Updated publication on income from sale of securities The Tax Authorities introduced an updated publication „How income derived from sale or other transfer of securities in the tax period beginning with 2011 and the subsequent tax periods shall be

taxed“. The procedures for taxation of transfer of securities, establishment of acquisition price, application of tax incentives and completing tax returns are explained in the publication. Letter No. (32.42-31)-1-RM-2 issued by the Tax Authorities on 31 December 2012.

Updated order regarding the application of the European Union social security legislation The Order of the Coordination of Social Security Systems No V-253 has been amended with respect to circumstances under which A1 certificate is issued in Lithuania. The changes are related to the amendment of EU Regulation No 883/2004 dated 22 May 2012. The Order of the State Social Insurance Fund Board No V-614 dated 7 December 2012.

Foreigners working with national visas D will not have to pay the obligatory health insurance contributions As from 1 January 2013 foreigners working in the Republic of Lithuania under employment agreements and having national visas D will be exempt from the payment of the obligatory health insurance contributions. The employers will have to pay (and withhold) from their salaries all the other types of the obligatory social security contributions (pension, illness and maternity, etc.). PwC 7

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For more information please see the press release dated 20 December 2012.

General Information Changes to the official Commentary on the Law on Real Estate Tax The Commentary on the Law on RET has been changed according to the provisions of the Law on RET that are effective from 1 January 2012. The main changes of the Commentary are as follows: 

Immovable property is recognized even if it is not registered with the Real Estate Register.



Property which is not actually used, construction which has not been finished or the property has been created or acquired on the basis of the general public-private partnership while the agreement of the partnership is effective and the property is used for the purpose established in the agreement is not subject to RET.



The aggregate value of structures (premises) owned and acquired by individuals intended for dwelling purposes, gardens, garages, homesteads, greenhouses, farms, subsidiary farms, science, religion and recreation, fishfarming structures as well as engineering structures exceeding LTL 1 million is subject to RET. 1% RET rate is applied on the part of the value of immovable property exceeding LTL 1 million.

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As of 1 January 2013 municipalities have a right to set the rate of RET in the range from 0,3% to 3%.

The most important changes in the standards: 

If small partnerships choose to apply all the BASs, they will structure a condensed balance sheet and condensed profit (loss) statement in accordance with the 2nd and 3rd BAS requirements, condensed explanatory note in accordance with the 6th BAS requirements.



If unlimited liability legal entities (excluding general or limited partnerships, in which all members are public or private companies) choose to apply all the BASs, a condensed balance sheet, condensed profit (loss) statement, statement of changes in equity and condensed explanatory note will be prepared in accordance with the 2nd, 3rd, 4th and 6th BASs requirements.

Letter No. (32.42-31-1)-RM-6962 issued by the Tax Authorities on 14 December 2012.

The rates of late payment interest and tax credits remain unchanged Unchanged rates of tax credits and late payment interest for the first quarter of 2013, 0.01% and 0.03% respectively, were approved. Order No 1K-247 issued by the Minister of Finance on 13 December 2013.

2nd, 3rd, 4th and 8th Business Accounting Standards were changed The 2nd Business Accounting Standard (BAS) “Balance sheet”, 3rd BAS “Income statement” , 4th BAS “Statement of changes in equity” and 8th BAS “Equity” changes mainly relate to the new 38th BAS “Record keeping and financial reporting of unlimited civil liability legal persons and small partnerships.”



General or limited partnerships, in which all members are public or private companies, will be able to choose both the full and condensed financial statements.



Small partnerships and unlimited liability legal entities will show actually received owners’ contributions in the capital article.



Agricultural enterprises which use a prime cost method for agricultural production and biological assets valuation will be able to choose both the full and condensed income statement form (1st, 2nd and 3rd Annexes of the 3rd BAS).

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Adjustments will take effect to the financial statements for 2013 and subsequent periods. Orders No VAS-19, VAS-20, VAS-21, VAS-22 approved by the Director of the Audit and Accounting Office 14 December 2012.

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Registered users can provide completed statistical reports by e-mail [email protected].

Restrictions may be imposed on alcohol sales using electronic means of communications



Statistical data can be imported directly from the respondent's business management and accounting systems.

After a hearing, the Parliament voted in favor of the draft amendments to the Law on Alcohol Control, which are aimed at setting forth a restriction on sales of alcoholic drinks using electronic means of communications (including the Internet). The remedy is aimed at reducing the availability of alcohol, protecting consumer interests and the public health.

35th Business Accounting Standard “Transformation of entities” was supplemented Now the 35th standard includes provisions of a small partnership transformation into a public or private limited company and an individual enterprise or partnership, and also provisions of a public or private limited company and an individual enterprise or partnership transformation into a small partnership. Order No VAS-23 approved by the Director of the Audit and Accounting Office 14 December 2012.

Lithuanian Department of Statistics launched a new electronic statistical compilation and transmission system A new system called “e. statistika” has replaced previous statistical data reporting and collecting system "e-formos". The most important changes in the system: 

Statistical reports completion and submission is moved to the Internet.

New obligation on tax payers came into force As of 1 January 2013 amendments to the Law on Tax Administration became effective, which introduced a new obligation for residents of Lithuania. For example, they will have to provide information on transactions concluded with natural or foreign legal persons exceeding the threshold of LTL 50,000 if these transactions are not notarized and income received thereof is not declared under procedures stipulated in the relevant tax laws. The Amendments also establish a right for the Tax Administrator to request form taxpayers to make only non-cash settlements with other companies and natural persons for a limited period of time (up to one year). More information about the changes, which came into force, can be found in our newsletter of August 2012, No. 153.

It should be noted that an analogous amendment on banning sales of tobacco products sales using electronic means of communications has already been set forth in Part 2 of Article 15 of the Law on Tobacco Control. The Parliament will have to vote for a second time so that the above amendments take effect. In case the amendments to the Law on Alcohol Control No. XIP-4189(2) will be adopted they should come into force from 1 July 2013.

Real Estate News As of 1 January 2013 the following amendments to the laws became effective: 

limiting an opportunity for activities in the protected areas (banning GMO cultivation);

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the list which allows to change the forest land into land of another purpose is supplemented with the case of a homestead is being restored in the private forest land. In such cases it is permissible to change the forest land into land of another purpose, even if the land is located 1 km away from the Baltic Sea, the Curonian Lagoon or other protected areas.

The Amendments to the Law on Protected Areas No. XI-1993.

Legal News



The Bank of Lithuania Board Resolution No. 03176 on Approval of General Regulations on Internal Management of Banks;



The Bank of Lithuania Board Resolution No. 03234 on Approval of Description of Regulations on Provision of Information about Financial Products to the Bank of Lithuania;



The Bank of Lithuania Board Resolution No. 03-245 on Approval of Regulations on Calculation of Annual Rate for General Cost of Consumer Credit;



The Bank of Lithuania Board Resolution No. 03248 on Approval of Regulations on Provision of Information about the Consumer Credit Grantors to the Bank of Lithuania.

The Amendments to the Law on Forest No. XI-2361.

Finance Law News As of 1 January 2013, a number of legal acts became effective which aimed at strengthening supervision of banks and other financial market participants. They identify the requirements and content of additional quarterly information which is important for supervision of financial market participants. The legal acts also define the basic principles and requirements designed to ensure the effectiveness of banks’ organizational structure and internal management. The rules on calculation of a full amount of consumer credit and the cost, which the consumer may incur after the conclusion of the consumer credit agreement, are specified, too. 

The Bank of Lithuania Board Resolution No. 03209 on Approval of Regulations on Provision of Information about Internal Management and Operations of Banks to the Bank of Lithuania;

Tax Case-Law

Minimum monthly wage increase On 19 December 2012 by resolution the Government of the Republic of Lithuania upon the recommendation of the Tripartite Council informed that as of 1 January 2013 minimum monthly wage is increased to LTL 1, 000 and minimum hourly pay – to LTL 6,06. The Resolution of the Government of the Republic of Lithuania No. 1543.

Altered or hidden circumstances attributable to taxation overrule form of the taxpayer's activities On 10 December 2012 the Supreme Administrative Court of Lithuania (hereinafter - SACL) adopted a decision in administrative case No. A602-2698/2012 on the application of the principle of supremacy of substance over form. The Tax Authority audited the correctness of payments of CIT from 2006 to 2008 and established that the applicant had concluded vehicle rental agreements with its employees but made no real payments to the employees and as a result had illegally attributed such expenses to tax deductable expenses. The Tax Authority claimed that the applicant had not incurred any real expenses and therefore calculated an additional amount of LTL 205, 877 of CIT and LTL 91,409 of penalty interests and imposed a fine, following the principle of substance over form. The SACL supported the position of the Tax Authority’s ruling that the Tax Authority should apply the principle of substance over form whenever a taxpayer's transaction, economic operation or its group is concluded just for the sake of receiving tax benefits. In this case the Tax Authority should not take into consideration the form of the taxpayer's PwC 10

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activities but rather restore the altered or hidden circumstances attributable to taxation as provided by taxation laws, and calculate the taxes due in accordance with respective provisions of the mentioned taxation laws. In the case above it has been proved beyond any doubt that the applicant had concluded the vehicle rental agreements with its employees just for the sake of obtaining tax benefits by means of including its expenses not actually incurred into its costs and thus reducing the CIT due.

VAT on construction services becomes chargeable as from the moment when building right is established

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The EUCJ analyzed the question when the taxable moment appears: at the date of the establishment of the building right, or at the date when the construction services are supplied. According to the EUCJ, the obligation to calculate output VAT arises at the moment when the building right is established provided that all the relevant information concerning that future supply of services is already known, the services are precisely identified and the value may be expressed in monetary terms. Additionally, since the transaction was performed between not related parties, the open market value criterion should not be applied.

On 29 December, the European Union Court of Justice (EUCJ) ruled in case C-549/11, where the following situation was analyzed: the landlords of the land established building right to the company to construct a building on their land in return of certain real property in that future building. The taxable amount was considered to be the notarized value of the building right, but not the market value of the property to be transferred to the landlords.

Tax & Legal Alert Lithuania • 21 January 2013 Legal Disclaimer: The material contained in this alert is provided for general information purposes only and does not contain a comprehensive analysis of each item described. Before taking (or not taking) any action, readers should seek professional advice specific to their situation. No liability is accepted for acts or omissions taken in reliance upon the contents of this alert. PwC firms help organisations and individuals create the value they’re looking for. We’re a network of firms in 158 countries with close to 169,000 people who are committed to delivering quality in assurance, tax and advisory services. Tell us what matters to you and find out more by visiting us at www.pwc.com. © 2013 PwC. All rights reserved. Not for further distribution without the permission of PwC. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.

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