Lithuania’s tax authority clarifies which financial services remain VAT-exempt and which are taxable ahead of 2026 changes.
Lithuania’s State Tax Inspectorate (VMI) has issued updated guidance on Article 28 of the Law on VAT, clarifying the application of VAT exemptions for financial services.
The revisions introduce a new “technical/administrative services” rule under Article 28(9), specifying that purely administrative, physical, technical, or similar services that do not alter the legal or financial position of the parties in a financial transaction are not VAT-exempt. Such services will generally be treated as standard taxable supplies.
From 2026, the prior mechanism allowing authorised institutions to maintain a detailed list of exempt financial services under Article 28(8) will be repealed.
The VAT exemption continues to apply to core financial activities, including:
- Loans (granting, intermediation, and lender-performed management);
- payment-related services, such as deposits, money transfers, clearing, and non-cash settlement operations (including payment card issuance and servicing);
- currency transactions and cash handling linked to banknotes and coins; and
- securities and derivatives transactions, including related intermediation and directly associated services.
The guidance also clarifies that certain exempt services may optionally be subject to VAT, subject to minimum application periods and notification requirements. Technical services such as debt collection, factoring, and IT support for banking systems remain taxable. Digital currency exchanges, including Bitcoin, fall under the VAT exemption, while safekeeping and management of securities are subject to specific rules.
These updates take effect on 1 January 2026.
