Value Added Tax Rates in Baltics
Country	Standart rate	Decreased rate
Latvia	21%	12% medical treatment, medical equipment, books, hotels
Lithuania	21%	9% 5% - medical products
Estonia	20%	9% books, media, hotel services, medical treatment and equipment etc.

 

VAT REGISTRATION IN LATVIA

 

The VAT is paid in the State budged by every taxpayer, who is registered (or who has to be registered according to Value Added Tax Law) in the State Revenue Service Value added tax register and who performs taxable transactions, which inland are applied with the tax.

 

Taxable transactions

1.) With VAT imposable transactions are such inland transactions, performed within the framework of economic activities:

• delivery of goods for remuneration;
• providing services for remuneration;
• acquisition of goods within the European Union for remuneration;

 

2.) Any import of goods is imposed with VAT.

 

Regarding exceptions please contact Gencs Valters Law firm.

 

3.) Taxable transaction is purchase of a new vehicle within the territory of European Union, performed by the non-registered taxable person or person who is not the taxpayer.

 

4.) Taxable transaction is also occasionally performed deliveries of new vehicles, in case the supplier, recipient or a third party on behalf of the supplier or recipient from inland dispatches or transports a new vehicle to the recipient to a destination outside the inland, but within the territory of EU.

 

Taxpayers

The taxpayer is a person who independently performs in any place any economic activity, with respect of the purpose or results of the activity.

 

Taxpayers are classified:

1. Domestic tax payers – (registered taxpayers - who are registered in the State Revenue Service in the Value added tax register; non-registered taxpayers - who are not registered in the State Revenue Service Value added tax register);
2. Taxpayers of other Member States (registered/ non-registered);
3. A third country or third territory taxpayers (registered/ non-registered);

 

As registered taxpayer is considered also fiscal agent and the VAT group.

 

The taxpayer in respect of received construction services is considered also state or local authority or municipality.

 

In any case, a public person shall be considered as a taxpayer, if it provides electronic communication services, supplies of goods, including water, gas and electricity, provides freight transport services, provides tourism services etc.

 

For detailed information, please contact Gencs Valters Law firm.

 

VAT Group

VAT group is a group of two or more taxpayers, founded in accordance with VAT Group Foundation agreement, for performing mutual transactions inland, and is registered in the State Revenue Service Value added tax register.

 

Tax rates in Latvia

1. The standard rate 21 %;
2. The reduced tax rate of 12 %;
3. Tax rate of  0 %.

 

The reduced tax rate applies to: medical supplies; milk and dairy products; regular inland transportation services of passengers and their baggage; delivery of textbooks and the original literature; accommodation services; delivery of wood fuel, heat etc.

 

Tax rate of 0 % applies to: export and import of goods; acquisitions of goods within the EU performed by the fiscal agent; to services related to export or import of goods or transit of goods; delivery and import of the ships,  aircrafts; delivery of goods if the natural person from the third country or third territory, who is not a taxpayer in EU territory, exports acquired goods from the territory of the EU; delivery of goods and services provided to diplomatic and consular missions, international organizations, institutions of the EU and NATO.

 

The 0 % tax rate shall not be applied if the registered taxpayer, who has performed the transaction, can not present the export documents, or documents certifying the application of 0 % tax rate.

 

VAT Register

The taxpayer, prior to the performance of taxable transactions or receiving services, shall register in the State Revenue Service Value added tax register.

The Taxpayer for performance of the transactions has the right to register in the State Revenue Service Value added tax register for a certain period of time.

 

In the State Revenue Service Value added tax register shall be registered:

1) natural persons;
2) legal persons;
3) partnerships;
4) natural persons authorized by the group of individuals, if the group performs economic activity on the basis of the Agreement;
5) VAT groups;
6) fiscal agents.

7) taxpayers of the other Member State;
8) the representatives inland of the taxpayer of the other Member State.

Taxpayers are registered in the VAT register according to the registration request submitted to the State Revenue Service.

The State Revenue Service within 5 working days after receipt of the registration request shall decide on the taxpayer registration in the Value added tax register or decision to refuse registration.

 

Taxation periods

1) 1 month – if the taxable transaction value in pre-taxation year or fiscal year exceeds 35`000 LVL.

2) 1 quarter;

3) half of the calendar year  - if the taxable transaction value in the pre-taxation year does not exceed

10`000 LVL and who does not perform delivery of goods within EU subject to tax rate of 0 %.

 

Tax declarations

The Cabinet of Ministers determines the order of filling and submitting the Tax declaration for the tax period. The VAT declaration consists of declaration for the tax period and its attachments (overview of the pretax and tax amounts; overview of the delivery of goods and provided services in the territory of EU; overview or overview amendments of the input and the amount of tax in the tax return for the tax period; overview of the delivered goods value distribution on free ports and special economic zones; overview of the use of the real property; overview of the transactions performed by the fiscal agent).

 

Terms of submitting the declaration

1. 20 days after expiry of taxation period - if the Declaration is submitted in the State Revenue Service using electronic reporting system;
2. 15 days after expiry of taxation period - if the Declaration is submitted to the State Revenue Service in paper form.

 

Within 20 days after the end of the taxation period the registered taxpayer has to pay the tax what is calculated for the taxation period in the State budget.

 

Special tax application regimes 

1) for farmers;

2) for services provided by tour operators;

3) for transactions with used goods, works of art, collectors' objects and antiques;

4) for transactions with investment gold;

5) for electronically provided services in the territory of EU for third country or third territory taxpayers;

6) for delivery of timber and related services;

7) for construction services;

8) for delivery of scrap metal and related services;

9) for transactions of delivery of used real property;

10) For tax payments and pretax deduction order.

 

Taxation treaties

In Republic of Latvia are in force and are applied Taxation treaties with more than 50 countries.

 

 

 

VAT REGISTRATION IN ESTONIA

 

The VAT is paid in the State budged by every taxpayer, who is registered (or who has to be registered according to Value Added Tax Act) in the value added tax register and who performs taxable transactions, which inland are applied with the tax.

 

Taxable transactions

1.) With VAT imposable transactions are such inland transactions, performed within the framework of economic activities:

     1) sale of goods;

     2) provision of services within Estonia;

     3) Intra-Community acquisition of goods;

     4) provision of services that are taxable in Estonia and supplied by a foreign taxable  person.

 

2.) Any import of goods is imposed with VAT.

 

3.) Taxable transaction is purchase of a new vehicle within the territory of European Union, performed by the non-registered taxable person or person who is not the taxpayer.

 

Regarding exceptions please contact Gencs Valters Law firm.

 

Taxpayers

The taxpayer is a person, including a legal person in public law or a state, rural municipality or city authority, who is engaged in business and is registered or required to register as a taxable person. A taxable person of a foreign state or another Member State is a person, including a pool of assets or association of persons without the status of legal person, treated as a person liable to value added tax according to the legislation of the state in question.

 

Taxpayers are classified:

1)  Domestic tax payers;

2)  Taxpayers of other Member States;

3)  A third country or third territory taxpayers;

 

A foreign taxable person is not deemed to be an Estonian taxable person due to its permanent establishment located in Estonia and engaged in business if the foreign person does not participate in a transaction or act subject to taxation through its permanent establishment located in Estonia.

 

For detailed information, please contact Gencs Valters Law firm.

 

Tax rates in Estonia

1. The standard rate 20 %;
2. The reduced tax rate of 9 %;
3. Tax rate of  0 %.

 

The reduced tax rate applies to: books and workbooks used as learning materials; medicinal products, contraceptive preparations, sanitary and toiletry products, and medical equipment or medical devices intended for the personal use of disabled persons within the meaning of the Social Welfare Act and the grant of the use of such medical devices to disabled persons; periodic publications, excluding publications mainly containing advertisements or personal announcements, or publications the content of which is mainly erotic or pornographic; accommodation services or accommodation services with breakfast, excluding any goods or services accompanying such services.

 

Tax rate of 0 % applies to: exported goods, Intra-Community supply of goods, cross-border business to business services, export and import related transport services, international passenger services, sale of certain services to foreign persons, goods and services supplied on board vessels and  aircrafts, delivery of goods, services provided to diplomatic and consular missions, international organizations, institutions of the EU and NATO, goods placed into free zones or free warehouses, or certain goods listed in Annex V of Council Directive 2006/112/EC that are placed into a VAT warehouse, gold transferred to Eesti Pank, services where the place of supply is not Estonia, supplies of goods under diplomatic and consular arrangements etc.

 

Exemptions are provided for transactions involving securities and financial services (with an option to tax domestically), insurance transactions, postal, health, social and insurance services, as well as services for the protection of children and young persons; the supply, letting and leasing of immovable property, lotteries and gambling, certain education services and transportation of sick, injured or disabled persons.

 

VAT Register

Registration is required of any person whose taxable supply (excluding import) exceeds 16 000 EUR  in a calendar year. 

 

For a foreign person engaged in business in Estonia, the registration obligation arises as of the first date on which the taxable supply occurs. A foreign trader must register for VAT in the following circumstances:

• When a trader, with no permanent establishment in Estonia and liable to taxation in another country, makes a taxable supply in Estonia that is not taxed by the Estonian taxable person.

• When a trader, liable to VAT in another Member State, makes a distance sale to a person in Estonia who is not registered for VAT purposes (excluding goods subject to excise duties), and the taxable supply of the distance sale exceeds 35 000 EUR as calculated from the beginning of the calendar year.

• When a trader, liable to VAT in another Member State, makes a distance sale of goods subject to excise duties to a natural person in Estonia for personal purposes.

When a trader, liable to VAT in another Member State, makes distance sale to an Estonian (excluding goods subject to excise duties), the trader can register for VAT voluntarily.

A person liable for VAT in another country without a permanent establishment in Estonia may appoint a tax agentapproved by the Tax and Customs Board.

The Tax and Customs Board within 3 working days after receipt of the registration request shall decide on the taxpayer registration in the Value added tax register or decision to refuse registration.

 

Taxation periods

The taxable period is one calendar month. 

On the basis of a reasoned request made by a taxable person, the head of the tax authority may establish a taxable period longer than one calendar month. Then taxable period begins on the first day of the calendar month or first taxable period and ends on the last day of one of the following calendar months.

 

 

Tax declarations

Filing and payment is made on a monthly basis by the 20th day of the following month. VAT declarations shall be submitted electronically.

 

Financial Minister has determined the form of the VAT declarations and filling instructions. Following data shall be submitted on VAT declaration:

 

• Acts and transactions subject to tax at a rate of 20 %, including self-supply of goods or services taxable at 20 %;
• Acts and transactions subject to tax at a rate of 9 %, including self-supply of goods or services taxable at 9 %;
• Acts and transactions subject to tax at a rate of 0%, including exportation of goods and Intra-Community supply of goods and services provided to a taxable person of another Member State/ taxable person with limited liability;
• Value added tax payable upon the import of the goods;
• VAT paid or payable on acquisition of fixed assets;
• Intra-Community acquisitions of goods and services received from a taxable person of another Member State;
• Acquisition of other goods and services subject to VAT;
• Acquisition of immovables and metal waste taxable by special arrangements for imposition of value added tax on immovables and metal waste;
• Supply exempt from tax;
• Supply of goods taxable by special arrangements for imposition of value added tax on immovables and metal waste and taxable value of goods to be installed or assembled in another Member State.

 

Taxation treaties

In Republic of Estonia are in force and are applied Taxation treaties with more than 50 countries.

 

 

 

VAT REGISTRATION IN LITHUANIA

 

The VAT is paid in the State budged by every taxpayer, who is registered (or who has to be registered according to Value Added Tax Law) in the State Taxes Inspection Value added tax register and who performs taxable transactions, which inland are applied with the tax.

 

Taxable transactions

1.) With VAT imposable transactions are such inland transactions, performed within the framework of economic activities:

• delivery of goods for remuneration;
• providing services for remuneration;
• the goods and/or services are supplied by a taxable person in the performance of his/its

economic activities, i.e. acting as such;

 

2.) Any import of goods is imposed with VAT.

 

Regarding exceptions please contact Gencs Valters Law firm.

 

3.) Acquisitions of new means of transport effected by any person within the territory of European Union;

 

4.) Acquisition of goods for which excise duties become chargeable under the Law of the Republic of Lithuania on Excise Duties by any person except for a natural person who is not a taxable person within the territory of European Union.

 

Taxpayers

The taxpayer shall mean a taxable person identified for purposes of value added tax by the tax administrator, including any other identification for value added tax purposes, provided the person has been issued with an appropriate identification number, except for the identification of persons for flat-rate VAT scheme purposes.

 

Taxpayers are classified:

4)      Domestic tax payers – (registered taxpayers - who are registered in the State taxes Inspection in the Value added tax register; non-registered taxpayers - who are not registered in the State Taxes Inspection Value added tax register);

5)      Taxpayers of other Member States (registered/ non-registered);

6)      A third country or third territory taxpayers (registered/ non-registered);

 

For detailed information, please contact Gencs Valters Law firm.

 

Tax rates

1)  The standard rate 21 %;

2)  The reduced tax rate of 9 %;

3)  The reduced tax rate of 5 %;

4)  Tax rate of 0 %.

 

The reduced 5 % tax rate applies to: medical products and medical purposes products subject to compensation from the state medical insurance budget; equipment for technical assistance of disabled persons and repairing of such equipment.

 

The reduced 9 % tax rate applies to: for heating and hot water supplies to living premises (till 31^st Dec 2013); for supply of books and printed non-periodical materials, as well as journals and magazines (except the ones of erotic, violent, unethical material or more than 4/5 of advertising material, promotional publications); for passenger transport services on regular routes listed by the state bodies, including passengers’ luggage transport on such routes.

 

Tax rate of 0 % applies to: goods exported from EU, transport and other services directly related to export of such goods; goods transported or dispatched within EU (assuming “reverse charge” in another Member State); transport of goods imported to EU and other services related to import of such goods; insurance and other financial services related to import of such goods, insurance and financial services directly related to export of goods; goods placed under temporary storage; goods supplied to free economic zones; goods placed for temporary import under relief from customs duties, processing under customs control, etc.

 

VAT Register

The taxpayer, prior to the performance of taxable transactions or receiving services, shall register in the State Taxes Inspection Value added tax register.

 

In the State Taxes Inspection Value added tax register shall be registered:

1.)    Residents (individuals and legal entities) must register as VAT payers if their turnover form economic activity through a period of 12 successive months exceeds LTL 155.000 (EUR 45.000). For voluntary registration no threshold is required.

2.)    Non-residents must apply for registration from the commencement of activities in Lithuania – no turnover limit shall be applicable to them. No VAT registration is required when reverse-charge VAT is applicable.

3.)    Farmers subject to compensatory VAT rate, taxable persons performing VAT-exempt activities, Lithuanian non-taxable legal persons (for example, state bodies) must register as VAT payers when value of goods purchased from other EU state during the current or previous calendar year exceeded LTL 35.000 (EUR 10.000).

 

Taxpayers are registered in the VAT register according to the registration request submitted to the State Taxes Inspection.

The State Taxes Inspection within 5 working days after receipt of the registration request shall decide on the taxpayer registration in the Value added tax register or decision to refuse registration.

 

Taxation periods

1) 1 month – if annual income of VAT payer exceeds LTL 200.000 (EUR 58.000).

2) half of the calendar year  - if annual turnover of VAT payer does not exceed LTL 200.000 (EUR 58.000), the payer may ask the State Taxes Inspection to change the taxable period into the half of the calendar year periods.

 

Tax declarations 

Monthly VAT declarations must be filled and VAT must be paid by the 25^th day of the following month.

 

Advance VAT must be paid by VAT payers whose average monthly VAT liability exceeds LTL 10.000.000 (EUR 2.900.000) in 3 consecutive months.

 

State Taxes Inspection has determined the form of the VAT declarations and filling instructions. Following data shall be submitted on VAT declaration:

 

• Transactions of supply of goods and services (taxable value of: transactions subject to VAT; transactions subject to VAT when VAT is calculated by the buyer; VAT exempt transactions; consumption for personal needs; production of long-term material assets; equity of transactions with special taxation scheme; export of goods (0%); goods supplied to VAT payers within EU (0%); other transactions subject to VAT (0%); transactions outside Lithuania (not subject to VAT in Lithuania));
• Transactions of acquisition of goods and services (taxable value of: goods acquired from EU; services received from EU (indicating the part received from EU VAT payers);
• Output and input VAT;
• Deductable VAT (percentage);
• Output VAT, deductable VAT, payable (reimbursed) VAT: output VAT of 21%, 9%, 5 % rate; when VAT shall be withheld and paid by the buyer; output VAT for goods acquired from EU; deductable VAT.

Taxation treaties

In Republic of Lithuania are in force and are applied Taxation treaties with 48 countries.