VAT in Lithuania: Who needs to register, when and why?

Running a business in Lithuania or even selling into the Lithuanian market comes with its own set of tax obligations. One of the most important of these is VAT (PVM in Lithuanian: Pridėtinės Vertės Mokestis). But how do you know if you need to register for VAT? When does it become mandatory? And what are the benefits of registering voluntarily?

In this post, we’ll walk you through everything entrepreneurs need to know about VAT in Lithuania, clearly and without the legal jargon.

What is VAT and how much is it in Lithuania?

VAT is a consumption tax added to most goods and services. In Lithuania, the standard VAT rate is 21%. However, there are also reduced rates:

• 9% – for public transport, books, hotel accommodation, heating.
• 5% – for certain medicines and medical products.
• 0% – for exports and intra-EU transactions under specific conditions.

When do you need to register for VAT in Lithuania?

Let’s break this down by the type of business you run and where you’re located.

1. Lithuanian-based businesses

If your business is established in Lithuania and your annual turnover exceeds €45,000 over the past 12 months, you are legally required to register for VAT. The threshold is expected to increase to €60,000 from 2026.

Tip: Even if you haven’t reached the threshold yet, you can register voluntarily—which may give your business a more professional image and let you reclaim input VAT.

2. EU-based businesses (not registered in Lithuania)

If you’re selling goods or services to Lithuania from another EU country, the rules depend on the nature of your sales.

• Distance selling (B2C):
  If your B2C sales to Lithuania exceed €10,000 across the EU, you can either register for VAT in Lithuania or use the One-Stop Shop (OSS) scheme to simplify reporting across multiple countries.
• Intra-EU B2B sales:
  These often fall under the reverse charge mechanism, meaning the Lithuanian buyer accounts for the VAT. You typically don’t need to register for VAT unless you are warehousing goods or have other taxable presence.

3. Non-EU businesses

If you’re a company based outside the EU and you sell to customers in Lithuania, you’re generally required to register for VAT from your very first sale. There’s no threshold, you’re in from the start.

Also note: non-EU businesses must appoint a fiscal representative in Lithuania, which can be a local accounting or VAT compliance firm. They’ll help with registration, filing, and communications with the tax authorities.

How do you register for VAT in Lithuania?

The registration process involves submitting an application to the Lithuanian Tax Authority (VMI), usually electronically. You’ll need to provide:

• Company details and legal structure
• Business activities
• Proof of turnover (if applicable)
• Fiscal representative agreement (for non-EU companies)

Once approved, you’ll receive a VAT number starting with “LT” followed by 9 or 12 digits. This typically takes 2–4 weeks.

What happens after registration?

Once you’re VAT-registered, you’ll need to:

• Issue VAT invoices in accordance with Lithuanian rules.
• Submit VAT returns – usually monthly, but quarterly or semi-annual options may be available for smaller businesses.
• Submit Intrastat declarations (if your EU trade exceeds specific thresholds: €500,000 for imports and €300,000 for exports).
• Keep records for 10 years – including invoices, contracts, and declarations.

Deadlines & penalties

VAT returns must be submitted by the 25th day of the following month. Late submissions or payments may result in:

• Fines of €200 – 390
• Daily interest charges of 0.03%
• Possible audits or additional scrutiny

What is the reverse charge mechanism?

For B2B transactions within the EU, the reverse charge mechanism allows the buyer to account for the VAT instead of the seller. This is especially common in sectors like:

• Construction
• Telecommunications
• Digital services
• Cross-border goods movement

This rule reduces the need for VAT registration for foreign businesses but it’s important to understand when it applies.

Voluntary VAT registration: is it worth it?

Even if you’re not legally required to register, there can be strategic advantages to doing so:

• You can reclaim input VAT on your business purchases.
• It builds credibility with customers and suppliers.
• It prepares you for future growth or expansion across the EU.

Many startups and service-based businesses in Lithuania choose to register early to gain these benefits.

Final thoughts: stay compliant and stay ahead

Whether you’re a small local startup or an international e-commerce brand, understanding your VAT obligations in Lithuania is key to running a compliant and professional business.

Keep an eye on your revenue, track your cross-border sales, and don’t hesitate to seek expert help, especially if you’re selling into multiple EU countries.