Lithuania’s parliament (Seimas) has introduced a draft law amending the VAT Law to alleviate the VAT compliance burden on many small businesses and provide a tax break for B2C services, allowing them to exclude VAT from their pricing.
The proposal is currently under consideration by Parliament.
The draft proposes raising the annual sales threshold for VAT registration. Starting 1 January 2025, this threshold will increase from EUR 45,000 to EUR 55,000, making it the fourth highest in the European Union.
This increase in the VAT threshold is also partly a response to the unprecedented inflation rates exceeding 20% following the Russian invasion of Ukraine.
The draft proposes that a taxable person from another EU Member State can apply for a small business VAT exemption in Lithuania if their annual turnover in Lithuania does not exceed EUR 55,000 and their total EU turnover does not exceed EUR 100,000.
Small enterprises from Lithuania can request this exemption in other EU Member States if their EU turnover remains under EUR 100,000.
