REPUBLIC OF LITHUANIA

REPUBLIC OF LITHUANIA REPUBLIC OF LITHUANIA Law on the Tax on the Immovable Property of Enterprises and Organisations Article

1. Purpose of the Law This Law regulates taxation of immovable property of legal persons and the immovable propery of enterprises without the rights of legal persons to which legal registration is established. Article
2. Object of Taxation The object of taxation shall be immovable property located on the territory of the Republic of Lithuania and belonging by the right of ownership to legal persons and enterprises without the rights of legal persons (excluding land) to which immovable property legal registration is established. Article
3. Taxpayers The tax shall be paid by legal persons and enterprises without the rights of legal persons. Exempt from the payment of tax shall be: 1) foreign diplomatic missions and consular agencies, provided that in the countries which they represent diplomatic missions and consular agencies of the Republic of Lithuania are exempt from this or analogous tax; 2) institutions, enterprises and organisations of health care, education and studies, culture, sports, social care and maintenance, and pre-school institutions, enterprises and organisations; 3) residential house maintenance and garage maintenance associations and associations of gardeners which service only their respective members; 4) agricultural enterprises; 5) societies for the blind, deaf and other disabled persons as well as their enterprises; 6) charitable funds and charitable organisations; and 7) state-owned enterprises. Joint ventures and foreign capital firms shall pay the tax in accordance with the procedure applied to the enterprises of the Republic of Lithuania unless bilateral agreements between the states provide otherwise. Article
4. Rate of Tax The annual tax rate shall be: 1) on the immovable property used for the activities provided for in the taxpayer's bylaws -1% of the taxable value of the immovable property; and 2) on immovable property which is not used for the activities provided for in the taxpayer's bylaws for a period exceeding one year - 5% of the taxable value of the immovable property. Municipal councils into whose budgets the tax is included shall have the right to reduce the tax rate but not in excess of 50%. Article
5. Tax Exemptions Exempt from tax shall be: 1) immovable property or part thereof used for nature protection and fire prevention; 2) immovable property transferred without compensation for the use of charitable organisations and funds, institutions, enterprises and organisations of culture, education, social care and maintenance; 3) premises, buildings and structures used solely for the activities of the cult and for social care and maintenance, and for the manufacture of articles of the cult; 4) buildings, structures or their parts used for cemetery and burial services; 5) property of associations of house owners which is not used for profit (income) generation. Article
6. Taxable Value of Immovable Property Immovable property to which state legal registration is obligatory shall be valued by the state institutions established or authorised by the Government of the Republic of Lithuania. Immovable property shall be valued at taxable value in accordance with the methods established by the Government of the Republic of Lithuania. The valuation shall be valid for 5 years provided that the consumer price index does not exceed 1.25 per calendar year. Article
7. Tax Calculation The taxpayers shall every year calculate the tax on the immovable property which belongs to them by ownership right according to the taxable value of the immovable property as of 1 January of that year and shall file the calculations with the town (district) state tax inspectorate by 1 March. The correctness of the calculation of tax shall be controlled by the town (district) state tax inspectorate. The tax on newly acquired or built taxable immovable property shall be calculated in the amount of 1/12 of the annual sum for each month beginning from the month following legal registration of the property. The calculation of the tax amount shall be filed with the state tax inspectorate upon the expiry of one month after the legal registration of the property. For newly acquired property the amount of the tax due shall be divided proportionately for the remaining payment periods. Upon the transfer of the title to property to another person or upon the loss of said property, the tax shall not be calculated beginning from the month following the change in the legal registration of the property. Taxpayers who fail to pay the tax by the due date shall pay it for the period not exceeding two preceding years. Verification of taxable value and calculation of the amount of tax, and refunding or exaction of the tax shall also be permitted for the period not exceeding the two preceding years. Article
8. Procedure for the Payment of Tax The tax shall be paid by instalments equal to 1/4 of the yearly amount within 25 days after the end of the quarter. The tax on immovable property shall be included in the budget of the municipality on whose territory the property is located. Article
9. Liability for Incorrect Computation and Payment of Tax Upon establishing that the taxpayer has failed to file the tax calculation or has calculated a smaller amount than due, the state tax inspectorate shall collect without suit the additionally computed amount of the tax and a fine in the same amount. Failure to pay the tax by the due date shall incur interest in the amount of 0.3% for each day that the tax remains unpaid. Article
10. Dispute Settlement Procedure Disputes concerning the calculation of the tax on immovable property and the payment thereof shall be settled in accordance with the procedure established by the laws of the Republic of Lithuania. Article
11. Final Provisions This Law shall come into effect on 1 January 1995, with the exception of Article 6 which shall become effective on 1 January 1996 and the last paragraph hereof which shall come into effect on 1 August
12. Until such time as Article 6 comes into effect, the taxable value of immovable property shall be established in the following way: 1) the taxable value of enterprises and organisations which draw up a balance sheet shall be considered the original cost of said property indexed by applying the ratios prescribed by the Government of the Republic of Lithuania; 2) the taxable value of enterprises and organisations which do not have to draw up a balance sheet shall be considered the value by which the property is recorded at the state institution which registers immovable property. An enterprise or an organisation shall be prohibited from conducting activities in the event of failure to register the property owned by it. Prior to the coming into effect of the law on state legal registration of property, immovable property shall be registered in accordance with the procedure established by the Government of the Republic of Lithuania. The Government shall establish the procedure until 1 November 1994, specifying at the same time the list of immovable property the registration whereof is obligatory. If the consumer price index exceeds 1.25 per year, immovable property value must be indexed in accordance with the procedure established by the Government of the Republic of Lithuania. Prior to the coming into effect of Article 6, the Government of the Republic of Lithuania shall: 1) establish new state institutions and authorise the existing state institutions to value the immovable property by 1 January 1995; and 2) establish, by 1 June 1995, the methods for valuing the immovable property at market prices and the procedure for determining taxable value. Stock companies (former state stock companies) shall, in the period from 1 August 1994 to 31 December 1994, pay interest on the use of state capital according to the effective procedure. I promulgate this Law passed by the Seimas of the Republic of Lithuania. Algirdas Brazauskas President of the Republic Vilnius 20 July 1994 No. I-565