In response to the national and global situation relating to COVID-19, the State Tax Inspectorate under the Ministry of Finance of the Republic of Lithuania has issued a statement regarding the facilitation of the tax obligations to businesses.
The following measures are established in response to COVID-19:
In the situation of temporary financial difficulties, taxpayers may apply to the tax administrator for the deferral or distribution of the debt (tax underpayment):
How can a tax credit agreement be signed? The application for signing the TSA and other documents required for the examination of the application (the documents must specify the debt amount, preferred payment schedule as well as the reasons as to why currently it is not possible to cover the tax amount in full) are accepted by electronic means via “My STI” service on the STI portal. By taking the decision on signing the TCA, the STI individually examines each taxpayer’s application and situation based on the submitted information and following the approved criteria. The decision is made within 30 days from the date when the application and other documents were submitted. In case a positive decision is made regarding the distribution or deferral of the payment, the respective entity must sign the TCA within 10 business days.
Currently, the proposal is in place to enable signing the TCA also regarding the instalments of the Personal Income Tax (the “PIT”) maturing on 16 March 2020. This is particularly relevant to the employers due to the PIT deductible from the salary. Until the respective legislation is adopted permitting the tax credit agreement on the PIT (maturing on 16 March 2020), the STI will not enforce recovery of the said tax. The relevant draft amendments to the legislative acts were registered on 16/03/2020.
Following the existing legislative acts, businesses must submit the advance corporate income tax returns by 16 March. As mentioned above, the tax administrator carries forward the term to submit advance corporate income tax returns for Q1 2020 to the date of 30 March 2020.
In this context it is also relevant that:
In cases where taxpayers do not perform any activity on a temporary basis (do not make or perform any transactions; do not make any settlements with business entities; do not receive income, except for the interest on the balance of the taxpayers’ bank accounts), such taxpayers bay be temporarily be released from the obligation to file tax returns and/or other documents specified by the legislation.
The STI has extended the term to file the individual income returns and the PIT for the year 2019 until 1 July 2020.
The package provides for the following tax measures related to COVID-19:
Some of the provided tax measures (the TCA, a possibility to defer or distribute payment of the deducted PIT debt) are specified in the statement published by the STI. The STI has not published any information on the implementation of other tax measures so far.
In case your business entity needs any tax advice, please consult our experts.
Artūras Bakšys, Tax Partner, Head of Tax Practices
Edvard Gasperskij, Associate Partner, Tax Adviser
Agnė Pimpytė, Associate, Tax Law Expert
Jolita Čėsnė, Associate, Tax Law Expert
Akvilė Pauliūtė, Junior Associate