GOVERNMENT OF THE REPUBLIC OF LITHUANIA RESOLUTION No 821 of 4 June 2002 ON THE IMPLEMENTATION OF PROVISIONS OF THE LAW

(3)– 41

(8)of the Law of the Republic of Lithuania on Excise Duty.

1. To establish that: 2.
2. excise duty shall be payable as specified in Article 11

(2)of the Law of the Republic of Lithuania on Excise Duty if the amount of excise duty payable for the tax warehouse concerned as specified in the excise duty return filed by the authorised warehouse keeper (or a duly registered trader) exceeds LTL 50 000; 2.

1. for the purpose of establishing whether or not the payable amount of excise duty specified in the excise duty return filed for the tax period exceeds the threshold specified in subparagraph 2.1 above, account shall be taken of the amounts of excise duty payable for three previous tax periods; 2.
2. excise duty shall become payable, within time periods set in Article 11

(2)of the Law of the Republic of Lithuania on Excise Duty, in the calendar month following the month in which the average payable excise duty calculated in the manner specified in subparagraph 2.2 above reaches LTL 50 000; 2.4. for persons, who were paying excise duty according to the Law of the Republic of Lithuania on Excise Duty No I-429 of 12 April 1994 (Valstybės žinios (Official Gazette) No 30-530, 1994), excise duty for the period of July to October of 2002 shall be payable within time periods set in Article 10

(2)of the Law of the Republic of Lithuania on Excise Duty, if the average amount of excise duty payable for a calendar month in the period of April to June 2002 calculated according to the Law of the Republic of Lithuania on Excise Duty No I-429 of 12 April 1994 and the implementing legislation is not less than LTL 50 000. From November 2002 on, excise duty shall be payable within time periods set in Article 10

(2)of the Law of Republic of Lithuania on Excise Duty, if the average amount of excise duty calculated in the manner specified in subparagraph 2.2 above is not less than LTL 50

2. To charge the Ministry of Finance and the State Tax Inspectorate under the Ministry of Finance with the task of approving legal acts necessary for the implementation of the procedures approved by this Resolution.
3. This Resolution, except for paragraph 3, shall enter into force on 1 July
4. Prime Minister Algirdas Brazauskas Minister of Finance Dalia Grybauskaitė ___________________ APPROVED by Resolution No 821 of the Government of the Republic of Lithuania of 4 June 2002 CASES WHEN AN AUTHORISATION FOR THE OPENING A TAX WAREHOUSE MAY BE ISSUED I. OPENING OF A TAX WAREHOUSE IN THE CASE SPECIFIED IN ARTICLE 4

(1)OF THE LAW OF THE REPUBLIC OF LITHUANIA ON EXCISE DUTY

1. (Repealed)
2. An authorisation for the opening of a tax warehouse on the grounds laid down in Article 4

(1)of the Law of the Republic of Lithuania on Excise Duty may be issued if the average amount of excise duty calculated on the whole quantity of excisable goods to be kept at a time per day in the prospective tax warehouse under a duty suspension arrangement is projected to be not lower than: 2.

1. LTL 1m – if the prospective tax warehouse is intended for keeping, under a duty suspension arrangement, exclusively ethyl alcohol and alcoholic beverages and/or manufactured tobacco; 2.
2. LTL 2m – if the prospective tax warehouse is intended for keeping, under a duty suspension arrangement, fuel (except for petroleum gas and gaseous hydrocarbons) or fuel and ethyl alcohol and alcoholic beverages and/or manufactured tobacco; 2.
3. LTL 100thou – if the prospective tax warehouse is intended for keeping, under a duty suspension arrangement, exclusively petroleum gas and gaseous hydrocarbons and if these goods are not retailed directly from the warehouse.
4. An authorisation for the opening of a tax warehouse on the grounds laid down in Article 4

(1)of the Law of the Republic of Lithuania on Excise Duty may be issued if the person has engaged in the activities relating to excisable goods for at least 12 months. This restriction shall not apply where the tax administrator can be reasonably satisfied that the match between the prospective quantity of excisable goods specified by the person who wishes to open a tax warehouse and the minimum amounts set in paragraph 2 above is realistic (the person took over the activities relating to excisable goods from another person/persons following the reorganization of the latter, etc.). II. OPENING OF A TAX WAREHOUSE IN THE CASE SPECIFIED IN ARTICLE 4

(2)OF THE LAW OF THE REPUBLIC OF LITHUANIA ON EXCISE DUTY

1. An authorisation for the opening of a tax warehouse may be issued if the warehouse will be used for one or more types of the following activities: 4.
2. to supply excisable goods for provisioning of passenger and/or cargo ships and/or aircraft on international routes; 4.
3. to supply fuel for aircraft specified in Article 41

(1)of the Law of the Republic of Lithuania on Excise Duty; 4.3. to supply fuel for ships specified in Article 41

(2)of the Law of the Republic of Lithuania on Excise Duty; 4.4. to supply excisable goods only for the purposes specified in Articles 17

(1)– 17

(1)(3, 17

(6)and 17

(7)of the Law of the Republic of Lithuania on Excise Duty; 4.

1. to exhibit excisable goods at international exhibitions and fairs; 4.
2. to supply energy products specified in Annex 2 of the Law of the Republic of Lithuania on Excise Duty (with the exception of energy products coming under sub-headings 2710 11 31, 2710 11 41 to 2710 11 90, 2710 19 21 to 2710 19 29, 2710 19 41 to 2710 19 49, 2710 19 61 to 2710 19 6 and heading 2711 of the 2004 version of the Combined Nomenclature (hereinafter referred to as the CN).
3. An authorisation for the opening of a tax warehouse may also be issued: 5.
4. to a person producing excisable goods and/or engaged in their processing and/or mixing – to open a tax warehouse/s for auxiliary operations (packaging., any further industrial handling, etc.), provided that these are performed in premises and/or territory/s other than those where production, processing and/or mixing operations are performed but only where it is impossible to carry out the said operations in the tax warehouse in which production, processing and/or mixing operations are performed; 5.
5. to a person, who is obliged to maintain and manage, in the manner established by legal acts, state stocks of petroleum products – to open a tax warehouse exclusively for keeping, under a duty suspension arrangement, state stocks of petroleum products; 5.
6. to a person, who is licensed, in the manner established by legal acts, to import tobacco and/or tobacco products – to open a tax warehouse exclusively for keeping, under a duty suspension arrangement, cigars and/or cigarillos and/or smoking tobacco; 5.
7. (repealed)
8. An authorisation for the opening of a tax warehouse for the activities specified in paragraphs 4 or 5 may be issued regardless of whether or not the conditions specified in paragraphs 1 to 3 are met. –––––––––––––––– APPROVED by Resolution No 821 of the Government of the Republic of Lithuania of 4 June 2002 RULES for the CALCULATION AND ADJUSTMENT OF THE Value of surety FOR THE OBLIGATIONs OF THE AUTHORISED WAREHOUSE KEEPER I. GENERAL PROVISIONS
9. The value of surety for the obligations of the authorised warehouse keeper shall be calculated as a percentage of the amount of excise duty calculated on the average quantity of excisable goods to be kept at a time per day in a tax warehouse under a duty suspension arrangement. The surety shall not be calculated on the quantity of excisable petroleum products to be maintained and managed by the person, as prescribed by legal acts, as state stocks of petroleum products.
10. For the purpose of calculating the value of surety, account shall be taken of the projected average quantity of excisable goods intended, as stated in the application filed by the person, to be kept at a time per day in the prospective tax warehouse under a duty suspension arrangement. If the tax administrator establishes an unreasonable overstatement (understatement) of the quantity declared to be kept, the tax administrator shall have the right to calculate the quantity for which surety is to be calculated using the actual data of a comparable tax warehouse (floor area, production equipment, etc). Where such data is not available, the calculation shall be based on the maximum quantity of excisable goods that may possibly be kept in the prospective tax warehouse.
11. The value of surety shall be calculated by the tax administrator responsible for registration of tax warehouses as laid down in the Law of the Republic of Lithuania on Excise Duty and the implementing legislation. II. CALCULATION OF THE VALUE OF SURETY FOR THE OBLIGATIONS OF THE AUTHORISED WAREHOUSE KEEPER
12. The value of surety for the obligations of the authorised warehouse keeper shall be 10% of the excise duty specified in paragraph 1 above, where the application for the opening of a tax warehouse is filed by a person who: 4.
13. has started the production and/or processing and/or mixing of excisable goods not later than on 1 January 2002 and who meets all of the following conditions: 4.1.
14. the person has not underpaid any taxes due to the budgets and/or funds, the taxes attributable whereto are administered by the State Tax Inspectorate, nor any contributions to the budget of the State Social Security Fund. If the payment of taxes, late payment charges or fines has been deferred in accordance with legal acts of the Republic of Lithuania or if there is a tax dispute concerning such taxes, late payment charges or fines, the applicant shall be deemed to have no underpayments. In this case, the person shall be deemed to meet the condition set in this paragraph, unless the tax underpayment exceeds LTL 1000; 4.1.
15. the person is not in default of his obligations to the customs; 4.1.
16. the applicant (if a natural person), and, where the applicant is a legal person, the applicant’s senior manager and the manager of the accounting unit or a senior finance officer (accountant), also the holder of the controlling block of shares (interest, participation) of the legal person (or its owner (member), where the legal person is an unlimited liability entity) have not been recognised guilty of crimes or criminal offences against finances, financial system, economic management or the economy and business or of forgery of documents, nor any of these persons have an unspent conviction for any of the above mentioned crimes, nor any of these persons have been administratively penalized under the Code of Administrative Offences of the Republic of Lithuania for: 4.1.3.
17. violation of the procedure for the submission of accounts and documents regarding his personal (if a natural person) income, assets, profit and taxes, or those of the enterprise, institution or organisation, and for tax evasion; 4.1.3.
18. selling, keeping or carrying goods without documents, also for forgery of special marks, i.e. tax stamps (if there are required by legal acts), and documents; 4.1.3.
19. fraudulent financial accounting; 4.1.3.
20. engaging in commercial, economic, financial or professional activities without holding a licence (authorisation) to engage in such activities, or for violation of the procedure for engaging in activities subject to licensing; 4.1.3.
21. failure to fulfil lawful instructions of managers and other officials of the State Tax Inspectorate, also for interfering with the exercise of other rights of these officials; 4.1.3.
22. intentional damage or removal of a seal affixed by a competent officer; 4.1.3.
23. sale of goods or services without using cash registers; 4.1.3.
24. violation of the procedure for the use of cash registers; 4.1.3.
25. violation of the procedure for the calculation and payment of wages and salaries; 4.
26. (repealed); 4.
27. (repealed); 4.
28. wishes to open a tax warehouse, and who has been engaged in the activities involving excisable goods, which he intends to continue in the tax warehouse, for at least five years and meets all of the conditions set in paragraphs 4.1.
29. to 4.1.
30. of these Rules.
31. In other cases not covered in paragraph 4 of these Rules, the value of surety for the obligations of the authorised warehouse keeper shall be 100% of the amount of excise duty specified in paragraph 1 above. III. DELIVERY OF SURETY FOR THE OBLIGATIONS OF THE AUTHORISED WAREHOUSE KEEPER
32. To secure the implementation of the obligations of the authorised warehouse keeper, a surety shall be delivered for the value calculated in the manner defined in paragraphs 1 to 5 of these Rules; the surety shall be issued by an institution specified in Article 3

(20)of the Law of the Republic of Lithuania on Excise Duty having a contract with the central tax administrator. A surety shall be not be accepted if it is issued by: 6.

1. an insurance company which, due to sanctions imposed on it pursuant to the Law of the Republic of Lithuania on Insurance (Valstybės žinios (Official Gazette) No 94-4246, 2003) or pursuant to essentially equivalent legal acts of any other Member State, has no right to conclude surety insurance contracts; 6.
2. a banking institution deprived by the Bank of Lithuania or supervisory institutions of other Member States of the right to provide surety services.
3. A surety may be issued for a maximum one-year period.
4. In the surety, the person who stands surety must undertake, in writing, to discharge tax obligations of the authorised warehouse keeper prescribed by the Law of the Republic of Lithuania on Excise Duty and other legal acts of the Republic of Lithuania in connection with the keeping, under a duty suspension arrangement, of excisable goods, in the event that the authorised warehouse keeper fails to discharge these obligations or discharges them improperly.
5. The surety and a copy thereof shall be delivered to the local tax administrator. If the local tax administrator finds the surety unacceptable, it shall draw up a justified refusal to accept the surety and send it to the authorised warehouse keeper.
6. An acceptable surety shall be registered in the register of sureties, the rules for maintenance whereof shall be established by the central tax administrator. The copy of surety shall be marked with an entry certifying the acceptance of surety and shall be returned to the authorised warehouse keeper, and the original of surety shall remain with the local tax administrator. The local tax administrator shall notify the central tax administrator of the accepted surety in the manner laid down by the central tax administrator.
7. Sureties for the obligations of authorised warehouse keepers shall be used in the manner laid down by the central tax administrator. IV. ADJUSTMENT OF THE VALUE OF SURETY FOR THE OBLIGATIONS OF THE AUTHORISED WAREHOUSE KEEPER
8. The value of surety for the obligations of the authorised warehouse keeper shall be adjusted on a written instruction of the local tax administrator in the following cases: 12.
9. after the end of every calendar quarter, if the excise duty calculated on the average quantity of excisable goods actually kept at a time per day exceeds the amount of excise duty on the basis whereof the value of the valid surety has been calculated by over 5% during the calendar quarter concerned; 12.
10. when the rates of excise duty set for excisable goods kept in the tax warehouse change; 12.
11. when the surety has been invoked to secure the discharge of tax obligations of the authorised warehouse keeper.
12. The value of surety must also be adjusted if the tax warehouse is intended to be used for production, processing, mixing or keeping of excisable goods other than those specified in the possessed authorisation to open a tax warehouse, also for operations other than those referred to in the said authorisation, where this would affect the amount of excise duty calculated on the average quantity of excisable goods to be kept at a time per day in the tax warehouse under a duty suspension arrangement.
13. If the surety for the obligations of the authorised warehouse keeper is also to be used for securing the discharge of tax obligations that may arise during transportation under a duty suspension arrangement but the value of surety proves insufficient, the value of surety has to be adjusted.
14. The value of surety for the obligations of the authorised warehouse keeper may be adjusted, i.e. reduced, at the request of the authorised warehouse keeper, to the amount specified in paragraph 4 of these Rules, if not a single violation defined in paragraph 1 of the Description of Cases When Additional Requirements May Be Imposed for the Operation of a Tax Warehouse has been made over 12 calendar months of operation of the warehouse where excisable goods are produced and/or processed and/or mixed and if the authorised warehouse keeper meets all the conditions set in subparagraphs 4.1.
15. to 4.1.3 of these Rules.
16. The value of surety for the obligations of the authorised warehouse keeper shall be adjusted by delivering a new surety for the obligations of the authorised warehouse keeper (where the value of surety to be delivered to the tax administrator exceeds the value of the previous surety delivered by the person concerned, an additional surety for the difference in the amounts may be delivered).
17. The new/additional surety shall be delivered not later than within five working days from the date of receipt of a written instruction from the local tax administrator.
18. The new/additional surety shall be subject to the requirements set in Chapter III of these Rules.
19. Upon acceptance of the new surety, the previous surety shall be deemed invalid and shall be returned to the authorised warehouse keeper against signature.
20. The local tax administrator shall notify the central tax administrator of the acceptance of the new/additional surety. V. CASES WHEN NO SURETY IS REQUIRED
21. No surety for the obligations of the authorized warehouse keeper shall be required if: 21.
22. (repealed) 21.
23. the tax warehouse is used exclusively for keeping, under a duty suspension arrangement, state stocks of petroleum products; 21.
24. the tax warehouse is being opened by a small brewery defined in Article 21

(2)of the Law of the Republic of Lithuania on Excise Duty, exclusively for keeping, under a duty suspension arrangement, excisable goods produced by the brewery, and the authorised warehouse keeper meets all of the conditions set in subparagraphs 4.1.1 to 4.1.3 of these Rules and not a single violation defined in paragraph 1 of the Description of Cases When Additional Requirements May Be Imposed for the Operation of a Tax Warehouse has been made.

1. No surety for the obligations of the authorised warehouse keeper shall be required if the person (other than a state or municipal enterprise) wishing to open a tax warehouse files a written commitment to discharge obligations of an authorised warehouse keeper. This provision shall apply only where the person wishing to open a tax warehouse meets the following criteria: 22.
2. has been engaged in the activities involving excisable goods, which is intended to be continued in the tax warehouse, for at least five years; 22.
3. meets all of the conditions set in subparagraphs 4.1.1 to 4.1.3 of these Rules; 22.
4. has a registered formed authorised capital of at least LTL 20m., and the value of surety to be delivered pursuant to the provisions of paragraphs 4 and 5 of these Rules does not exceed 50% of the formed and registered capital, and the enterprise holds the corresponding value of assets that are not pledged (except for the assets pledged to the Ministry of Finance as a collateral for loans) or seized.
5. A written commitment to secure the discharge of the obligations of the authorised warehouse keeper may also be submitted by a legal person of the Republic of Lithuania controlling (directly or indirectly holding ¾ of votes in the person who wishes to open the tax warehouse) the person wishing to open the tax warehouse provided that all of the following conditions are met: 23.
6. the person who wishes to open the tax warehouse has been engaged in the activities involving excisable goods, which is intended to be continued in the tax warehouse, for at least five years; 23.
7. the controlling legal person has been engaged in the activities for at least one year; 23.
8. both the person wishing to open the tax warehouse and the person controlling it meet all of the conditions set in items 4.1.1–4.1.3 of these Rules and not a single violation defined in paragraph 1 of the Description of Cases When Additional Requirements May Be Imposed for the Operation of a Tax Warehouse has been made; 23.
9. the formed and registered authorised capital of the controlling legal person is at least LTL 40m, and the value of surety to be delivered pursuant to the provisions of paragraphs 4 and 5 of these Rules does not exceed 50% of the formed and registered authorised capital, and the enterprise holds the corresponding value of assets that are not pledged (except for the assets pledged to the Ministry of Finance as a collateral for loans) or seized.
10. Where one and the same person files written commitments to secure the discharge of the obligations with respect to several tax warehouses, the values of sureties to be submitted, in the manner prescribed in paragraphs 4 or 5 of these Rules, for every such warehouse shall be added up, for the purpose of assessing conformity to the criteria defined in subparagraphs 22.3 or 23.4 above.
11. The authorised warehouse keeper who has delivered a surety for the obligations of the authorised warehouse keeper shall have the right to address the central tax administrator with a request to release the surety and apply the provisions of paragraphs 22 and 23 above, if the requirements laid down in these Rules are met.
12. The written commitments referred to in paragraphs 22 and 23 shall be filed, accepted and registered in the manner prescribed by the central tax administrator.
13. If the registered and formed authorised capital of the authorised warehouse keeper or the legal person controlling it becomes insufficient to secure the discharge of obligations in the manner prescribed in paragraphs 22 or 23, a surety issued by an institution specified in paragraph 6 of these Rules for the deficient value shall be delivered not later than within five working days after a written instruction of the tax administrator.
14. If the authorised warehouse keeper or the controlling legal person who have filed a written commitment no longer meet at least one of the conditions set in subparagraphs 4.1.1 to .1.3 of these Rules and/or a new/additional surety has been demanded pursuant to the Description of Cases When Additional Requirements May Be Imposed for the Operation of a Tax Warehouse, a surety issued by an institution specified in paragraph 6 of these Rules shall be delivered, not later than within five working days after a written instruction of the tax administrator, for the value specified in paragraphs 4 or 5, or, where a new/additional surety has been demanded pursuant to the Description of Cases When Additional Requirements May Be Imposed for the Operation of a Tax Warehouse, for the value determined by the tax administrator. The right to use written commitments to secure the discharge of the obligations of the authorised warehouse keeper may be restored not earlier than after 12 calendar months from the prohibition to use them, provided that no new violations have been found within the specified period and the earlier violations have been corrected. –––––––––––––––– APPROVED by Resolution No 821 of the Government of the Republic of Lithuania of 4 June 2002 DESCRIPTION OF CASES WHEN ADDITIONAL REQUIREMENTS MAY BE IMPOSED FOR THE OPERATION OF A TAX WAREHOUSE
15. In addition to the cases defined in Article 6

(5)of the Law of the Republic of Lithuania on Excise Duty (Valstybės žinios (Official Gazette) No 98-3482, 2001; No 26-802, 2004), additional requirements for the operation of a tax warehouse may be imposed in the following cases: 1.

1. if a loss, sale or other unauthorised transfer or unauthorised receipt (acquisition) of special marks, i.e. taxmarks, released to the authorised warehouse keeper (unless taxmarks have been lost in the process of their automated pasting), or misaccounting of the use of special marking means have been established; 1.
2. if a loss and mismanagement of accounts of special colouring agents and chemical reagents intended for the marking of fuel have been established in the tax warehouse; 1.
3. if any violations of the procedure for keeping excisable goods, misaccounting of operations carried out in the tax warehouse or violations of requirements applicable to metering instruments have been established in the tax warehouse; 1.
4. if the authorised warehouse keeper fails to file the excise duty return in time for two successive tax periods or misses the excise payment date twice in turn; 1.
5. if it has been established that the authorised warehouse keeper no longer meets at least one of the conditions laid down in subparagraphs 4.1.1 to 4.1.3 of the Rules for the Calculation and Adjustment of the Value of Surety for the Obligations of the Authorised Warehouse Keeper;
6. (Repealed);
7. (Repealed);
8. The tax administrator shall select and impose, in accordance with the methodology for imposing additional requirements as approved by the central tax administrator, additional requirements (to demand to deliver a surety (unless a surety was required at the time of issuing the authorisation to open the tax warehouse) or a new/additional surety, to carry out a stock take, to appoint officers for monitoring the operation of the tax warehouse, to use other accounting programmes or to install meters, to change the current software, to introduce standardised software etc.). The tax administrator shall have the right to impose one or several additional requirements, which, however, must be reasonable for securing appropriate discharge of tax obligations taking into account the existing situation. The authorised warehouse keeper shall be allowed a reasonable time for the discharge of the said obligations.
9. Having decided to secure a proper discharge of tax obligations by demanding to deliver a surety for the obligations of the authorised warehouse keeper, the tax administrator shall have the right to demand that a new/additional surety be immediately (not later than within five working days from the date of receipt of this instruction from the tax administrator) delivered to the local tax administrator for the value that is sufficient to secure the discharge of all tax obligations that may arise in relation to the keeping, under a duty suspension arrangement, of excisable goods.
10. The central tax administrator shall additionally have the right to demand that: 6.
11. the value of surety be adjusted at the end of each calendar month; 6.
12. and/or the value of surety be calculated not on the average, but on the largest quantity of excisable goods kept in the tax warehouse at a time per day during the tax period.
13. The new/additional surety specified in this Description shall be delivered in the manner prescribed by the Rules for the Calculation and Adjustment of the Value of Surety for the Obligations of the Authorised Warehouse Keeper.
14. The authorised warehouse keeper who has not made, over 12 months from the discharge of the additional requirements, any violations defined in Article 6

(5)of the Law of the Republic of Lithuania on Excise Duty, or in subparagraphs 4.1.1 to 4.1.3 of the Rules for the Calculation and Adjustment of the Value of Surety for the Obligations of the Authorised Warehouse Keeper, or in paragraph 1 of this Description shall have the right to address the tax administrator with a request to withdraw the additional requirements set in paragraphs 4 to 6 above. The additional requirements shall be withdrawn by the tax administrator who has imposed them. 9. (Repealed). –––––––––––––––– APPROVED by Resolution No 821 of the Government of the Republic of Lithuania of 4 June 2002 OTHER CASES OTHER CASES WHEN THE AUTHORISATION FOR THE OPENING OF A TAX WAREHOUSE MAY BE WITHDRAWN 1. In addition to the cases defined in Articles 6

(1)– 6

(5)of the Law of the Republic of Lithuania on Excise Duty (Valstybės žinios (Official Gazette) No 98-3482, 2001; No 26-802, 2004), the issued authorisation to open a tax warehouse may be withdrawn on the decision of the tax administrator in the following cases: 1.1. if the authorisation to open a tax warehouse for keeping, under a duty suspension arrangement, not only fuel but also other excisable goods or only excisable goods other than fuel has been issued pursuant to Article 4

(1)of the Law of the Republic of Lithuania on Excise Duty and if it appears, after six months of operation of the warehouse, that in this six-month period the average amount of excise duty payable on excisable goods kept in the tax warehouse at a time per day is more than 10% below the minimum threshold set in paragraph 2 of the Cases When an Authorization for the Opening of a Tax Warehouse May Be Issued; 1.2. if the authorisation to open a tax warehouse for keeping, under a duty suspension arrangement, only fuel has been issued pursuant to Article 4

(1)of the Law of the Republic of Lithuania on Excise Duty and if it appears, after 12 months of operation of the warehouse, that in this twelve-month period the average amount of excise duty payable on excisable goods kept in the tax warehouse at a time per day is more than 10% below the minimum threshold set in paragraph 2 of the Cases When an Authorization for the Opening of a Tax Warehouse May Be Issued; 1.

1. if no operations provided for in the application for the issue of the authorisation to open a tax warehouse have been started in the tax warehouse within three months from the issue of the authorisation to open the tax warehouse; 1.
2. if no operations provided for in the application for the issue of the authorisation to open a tax warehouse have been carried out in the tax warehouse for at least three successive tax periods; 1.
3. if the authorised warehouse keeper fails to deliver, within three months from the issue of the authorisation to open a tax warehouse, a surety for the obligations of the authorised warehouse keeper (where such surety should have been delivered as laid down in legal acts) or a written commitment and/or licences required for operations in the tax warehouse; 1.
4. if no document securing the discharge of tax obligations is delivered within a month from the tax administrator‘s written instruction to deliver it; 1.7 in the failure to install, within three months from the issue of the authorisation to open a tax warehouse, the metering instruments required by legal acts, to use computerised financial accounting, and to keep to the schedule for the introduction of internet communication with the State Tax Inspectorate; 1.
5. if the authorised warehouse keeper fails to fulfil the additional requirements imposed according to the Description of Cases When Additional Requirements May Be Imposed for the Operation of a Tax Warehouse, within three months after expiry of the period allowed for the fulfilment of these requirements;
6. (Repealed). –––––––––––––––– APPROVED by Resolution No 821 of the Government of the Republic of Lithuania of 4 June 2002 PROCEDURE FOR SUBMITTING EVIDENCE OF A LOSS OF EXCISABLE GOODS DUE TO FORCE MAJEURE
7. Excisable goods shall be considered lost due to force majeure and thus exempt from excise duty if they have been lost for any of the following reasons: 1.
8. war (whether declared or not), civil war, riots or revolutions; 1.
9. natural disasters (heavy storms, cyclones, earthquakes, sea and river floods, lightning); 1.
10. explosion, fire, destruction of machines, industrial premises and any/all internal communications; 1.
11. boycott, strike, lockout, slow work as a form of strike, seizure of industrial or administrative buildings; 1.
12. other events of force majeure.
13. Where excisable goods for which excise duty has not been paid are lost in the tax period in the tax warehouse or during their transportation under a duty suspension arrangement for reasons specified in paragraph 1 above, the excise duty return for the tax period concerned shall be accompanied by documents confirming the event and the loss of goods (statements of events drawn up by an insurance company or its authorised persons, or documents issued by competent authorities specified in other legal acts, confirming the presence of force majeure and the loss of goods).
14. The decision to recognise the reasons for the loss of excisable goods as force majeure shall be taken by the local tax administrator, once the documents confirming the event and the loss of goods referred to in paragraph 2 above have been submitted. In the cases specified in subparagraph 1.5 above, the reasons for the loss of excisable goods shall be recognised as force majeure only when there is no proof that such reasons were the consequence of intentional actions of the authorised warehouse keeper.
15. If the documents confirming the event and the loss of goods cannot be submitted together with the excise duty return for the period concerned, but are submitted later, the overpaid amount of excise duty shall be credited or refunded in the manner prescribed in the Law of the Republic of Lithuania on Excise Duty (Valstybės žinios (Official Gazette) No 61-1525, 1995).
16. All decisions of the local tax administrator related to the implementation of this Procedure may be appealed against in the manner prescribed in legal acts. –––––––––––––––– APPROVED by Resolution No 821 of the Government of the Republic of Lithuania of 4 June 2002 OTHER MEANS OF SECURING THE DISCHARGE OF TAX OBLIGATIONS THAT MIGHT ARISE DURING THE MOVEMENT OF GOODS UNDER A DUTY SUSPENSION ARRANGEMENT I. GENERAL PROVISIONS
17. When goods move under a duty suspension arrangement between tax warehouses in the Republic of Lithuania in the manner prescribed in the Law of the Republic of Lithuania on Excise Duty (Valstybės žinios (Official Gazette) No 98-3482, 2001; No 26-802, 2004), the discharge of tax obligations that may arise during such movement may be secured, in addition to other measures provided for in the Law of the Republic of Lithuania on Excise Duty, by the following documents: 1.
18. a surety for the obligations of the authorised warehouse keeper; 1.
19. a common surety or guarantee to secure the discharge of all tax obligations that may arise during the movement of goods under a duty suspension arrangement; 1.
20. a written commitment to discharge tax obligations, delivered by the authorised warehouse keeper or the legal person controlling it. II. USE OF A SURETY FOR THE OBLIGATIONS OF THE AUTHORISED WAREHOUSE KEEPER TO SECURE THE DISCHARGE OF TAX OBLIGATIONS THAT MAY ARISE DURING THE MOVEMENT OF GOODS UNDER A DUTY SUSPENSION ARRANGEMENT
21. The authorised warehouse keeper shall have the right to address the local tax administrator with a request to grant the right to secure the discharge of tax obligations that may arise during the movement of goods under a duty suspension arrangement by a surety for the obligations of the authorised warehouse keeper, provided that the person who stands surety has expressly undertaken, in the surety, to discharge, inter alia, those tax obligations of the authorised warehouse keeper that may arise after the goods have been moved from the tax warehouse concerned under a duty suspension arrangement.
22. Upon receipt of the request specified in paragraph 2 above, the local tax administrator shall satisfy itself that the value of surety indicated in paragraph 2 above will suffice to duly secure the discharge of all obligations of the authorised warehouse keeper (related both to the goods during movement and those kept in the authorised warehouse).
23. Where the value of surety for the obligations of the authorised warehouse keeper proves to be or becomes insufficient, the authorised warehouse keeper shall deliver, on the written instruction of the local tax administrator, an appropriately adjusted/additional surety for the obligations of the authorised warehouse keeper or use other means for securing the discharge of tax obligations as established in the Law of the Republic of Lithuania on Excise Duty or in Other Means of Securing the Discharge of Tax Obligations that Might Arise during the Movement of Goods under a Duty Suspension Arrangement. III. USE OF A COMMON SURETY OR GUARANTEE TO SECURE THE DISCHARGE OF ALL TAX OBLIGATIONS THAT MAY ARISE DURING THE MOVEMENT OF GOODS UNDER A DUTY SUSPENSION ARRANGEMENT
24. Instead of separate suretys for each individual instance of movement, the authorised warehouse keeper shall have the right to deliver one common surety or guarantee to secure the discharge of tax obligations that may arise during the movement of goods under a duty suspension arrangement.
25. The value of the common surety (guarantee) shall not be lower than the value required for securing the discharge of all tax obligations that may arise in relation to excisable goods moved from the tax warehouse under a duty suspension arrangement during the tax period concerned.
26. The common surety (guarantee) may be issued for a maximum one-year period.
27. The common surety (guarantee) shall be issued by a banking institution or an insurance company specified in Article 3

(20)of the Law of the Republic of Lithuania on Excise Duty. A surety (guarantee) issued by a banking institution deprived by the Bank of Lithuania or by supervisory institutions of other Member States of the right to provide surety services, as well as a surety (guarantee) issued by an insurance company which, due to sanctions imposed on it pursuant to the Law of the Republic of Lithuania on Insurance or pursuant to essentially equivalent legal acts of any other Member State, has no right to conclude surety insurance contracts shall not be accepted.

1. Where one common surety (guarantee) referred to in paragraph 5 of Other Means of Securing the Discharge of Tax Obligations that Might Arise during the Movement of Goods under a Duty Suspension Arrangement is insufficient to secure the discharge of tax obligations that may arise in relation to new instances of movement of goods under a duty suspension arrangement, the authorised warehouse keeper, seeking to secure the discharge of tax obligations that may arise in relation to each new instance of movement, shall, on the written instruction of the local tax administrator, use the means provided for in the Law of the Republic of Lithuania on Excise Duty or accordingly increase the value of the common surety or guarantee referred to in paragraph 5 of Other Means of Securing the Discharge of Tax Obligations that Might Arise during the Movement of Goods under a Duty Suspension Arrangement by delivering a new/additional surety or guarantee. IV. USE OF A WRITTEN COMMITMENT TO SECURE THE DISCHARGE OF TAX OBLIGATIONS THAT MAY ARISE DURING THE MOVEMENT OF GOODS UNDER A DUTY SUSPENSION ARRANGEMENT
2. If, pursuant to the Rules for the Calculation and Adjustment of the Value of Surety for the Obligations of the Authorised Warehouse Keeper, the authorised warehouse keeper is not required to deliver a surety for the obligations of the authorised warehouse keeper or the surety is released, such person shall have the right to address the central tax administrator with a request to grant the right to secure the discharge of tax obligations that may arise during the movement of goods under a duty suspension arrangement by delivering a written commitment of the person or of the controlling person to discharge tax obligations that may arise during the movement of goods under a duty suspension arrangement. The form of the written commitment shall be defined by the central tax administrator.
3. Having examined, in a self-prescribed manner, the request referred to in paragraph 10 above, the central tax administrator shall grant the right to secure the discharge of tax obligations that may arise during the movement of goods under a duty suspension arrangement by delivering a written commitment and shall accept the commitment if the total value of all written commitments (covering all current obligations of the authorised warehouse keeper as well as those that may arise during the movement of goods under a duty suspension arrangement) does not exceed 50% of the formed and registered authorised capital and the enterprise holds the corresponding value of assets that are not pledged (except for the assets pledged to the Ministry of Finance as a collateral for loans) or seized.
4. If the total value of written commitments to discharge tax obligations that may arise during the movement of goods under a duty suspension arrangement exceeds the threshold set in paragraph 11 above, the central tax administrator shall withdraw the authorisation to secure the discharge of such obligations by delivering a written commitment. In this case, the authorised warehouse keeper shall have the right to use the means of securing the discharge of tax obligations, defined in Article 16

(1)of the Law of the Republic of Lithuania on Excise Duty or in subparagraph 1.2 of Other Means of Securing the Discharge of Tax Obligations that Might Arise during the Movement of Goods under a Duty Suspension Arrangement.

1. The central tax administrator shall notify the authorised warehouse keeper of the decisions referred to in paragraphs 11 and 12 above. V. FINAL PROVISIONS
2. Taking into account the data submitted in the annex to the excise duty return, the local tax administrator shall regularly monitor as to whether the means used by the authorised warehouse keeper for securing the discharge of tax obligations are adequate for the value of tax obligations that may arise during the movement of excisable goods under a duty suspension arrangement.
3. Information about tax obligations of the authorised warehouse keeper who uses written commitments to secure the discharge of tax obligations that may arise during the movement of goods under a duty suspension arrangement shall be submitted to the central tax administrator in the manner prescribed by the latter.
4. Having established that the used means of securing the discharge of tax obligations is not adequate for the tax obligations that may arise, the local tax administrator shall have the right to demand to use the means of securing the discharge of tax obligations prescribed by the Law of the Republic of Lithuania on Excise Duty until the authorised warehouse keeper starts using the means defined in Chapter II or Chapter III of Other Means of Securing the Discharge of Tax Obligations that Might Arise during the Movement of Goods under a Duty Suspension Arrangement.
5. If the authorised warehouse keeper fails to meet at least one of the conditions defined in subparagraphs 4.1.1 to 4.1.3 of the Rules for the Calculation and Adjustment of the Value of Surety for the Obligations of the Authorised Warehouse Keeper and/or if additional requirements have been imposed for the operation of the tax warehouse opened by him, the authorised warehouse keeper shall use the means provided for in the Law of the Republic of Lithuania on Excise Duty to secure the discharge of tax obligations that may arise during the movement of goods under a tax suspension arrangement. The right to use the means of securing the discharge of the obligations defined in subparagraphs 1.1 or 1.2 of Other Means of Securing the Discharge of Tax Obligations that Might Arise during the Movement of Goods under a Duty Suspension Arrangement may be restored not earlier than after 12 calendar months from the prohibition to use the means of securing the discharge of the obligations defined in subparagraphs 1.1 or 1.2 of Other Means of Securing the Discharge of Tax Obligations that Might Arise during the Movement of Goods under a Duty Suspension Arrangement, provided that no new violations have been found within the specified period and the earlier violations have been corrected. __________________ APPROVED by Resolution No 821 of the Government of the Republic of Lithuania of 4 June 2002 RULES FOR SECURING THE PAYMENT OF EXCISE DUTY PAYABLE IN THE REPUBLIC OF LITHUANIA FOR GOODS TO BE RECEIVED FROM ANOTHER MEMBER STATE
6. Rules for Securing the Payment of Excise Duty Payable in the Republic of Lithuania for Goods To Be Received from Another Member State (hereinafter referred to as these Rules) establish the procedure for securing the payment of excise duty for taxable goods to be received from another Member State (hereinafter referred to as the payment of excise duty) provided for in Articles 15

(3), 15

(6)and 15

(8)of the Law of the Republic of Lithuania on Excise Duty (Valstybės žinios (Official Gazette) 98-3482, 2004; 26-802, 2004).

1. The person who has a duty, pursuant to the Law of the Republic of Lithuania on Excise Duty, to secure the payment of excise duty may do so in any one or more of the following ways: 2.
2. by paying a cash deposit of the amount specified in these Rules; 2.
3. by delivering a surety (guarantee) of the value prescribed by these Rules, issued by a banking institution or an insurance company specified in Article 3

(20)of the Law of the Republic of Lithuania on Excise Duty. A surety (guarantee) issued by a banking institution deprived by the Bank of Lithuania or by supervisory institutions of other Member States of the right to provide surety services, as well as a surety (guarantee) issued by an insurance company which, due to sanctions imposed on it pursuant to the Law of the Republic of Lithuania on Insurance (Valstybės žinios (Official Gazette) No 94-4246, 2003) or pursuant to essentially equivalent legal acts of any other Member State, has no right to conclude surety insurance contracts shall not be accepted; 2.

1. by delivering a written commitment to secure the payment of excise duty. This means shall be applied only if the person is: 2.3.
2. a state or municipal institution; or 2.3.
3. has been VAT-registered in the Republic of Lithuania for at least five years; meets all the conditions defined in subparagraphs 4.1.1 to 4.1.3 of the Rules for the Calculation and Adjustment of the Value of Surety for the Obligations of the Authorised Warehouse Keeper; holds the formed and registered authorised capital of at least LTL 1m; the value of surety or cash deposit to be submitted pursuant to other provisions of these Rules does not exceed 10% of the formed and registered capital and the value of assets not pledged or seized corresponds to the said amount of the authorized capital. This subparagraph shall not be applicable to state and municipal enterprises.
4. The value of cash deposit or surety (guarantee) shall be calculated as a percentage, on the amount of excise duty payable on the quantity of excisable goods to be received from another Member State, applying the rate of excise duty that will be in force on the day of receipt of the goods.
5. The value of cash deposit or surety (guarantee) shall be calculated by the local tax administrator who shall be notified, in the manner prescribed by the Law of the Republic of Lithuania on Excise Duty and by legal acts governing the tax administrator concerned, of the planned receipt of excisable goods from another Member State.
6. The value of cash deposit or surety (guarantee) shall be 10% of the amount specified in paragraph 3 of these Rules, where the cash deposit or surety (guarantee) is delivered by a person who has been VAT-registered in the Republic of Lithuania for at least three years and meets all the conditions defined in defined in subparagraphs 4.1.1 to 4.1.3 of the Rules for the Calculation and Adjustment of the Value of Surety for the Obligations of the Authorised Warehouse Keeper.
7. In other cases not covered in paragraph 5 of these Rules, the value of cash deposit or surety (guarantee) shall be 100% of the amount specified in paragraph 3 of these Rules.
8. Cash deposits, sureties (guarantees) and written commitments regarding the obligations of persons in relation to excisable goods received from another Member State shall be delivered, registered, used and refunded/released in the manner prescribed by the central tax administrator. –––––––––––––––– APPROVED by Resolution No 821 of the Government of the Republic of Lithuania of 4 June 2002 RULES FOR APPLYING EXCISE DUTY EXEMPTIONS SPECIFIED IN ARTICLES 41

(3)– 41

(8)OF THE LAW OF THE REPUBLIC OF LITHUANIA ON EXCISE DUTY 1. Rules for Applying Excise Duty Exemptions Specified in Articles 41

(3)– 41

(8)of the Law of the Republic of Lithuania on Excise Duty (hereinafter referred to as these Rules) establish the manner of applying the excise duty exemptions specified in Articles 41

(3)– 41

(8)of the Law of the Republic of Lithuania on Excise Duty (Valstybės žinios (Official Gazette) No 98 – 3482, 2001; No 26-802, 2004) (hereinafter referred to as the Law). 2. The terms used in these Rules shall be understood as they are used in the Law. I. APPLICATION OF THE EXCISE DUTY EXEMPTION LAID DOWN IN ARTICLE 41

(3)OF THE LAW 3. No excise duty shall be levied on energy products listed in Annex 2 of the Law (with the exception of energy products specified in the Combined Nomenclature (hereinafter referred to as the CN) under the headings 27.10 11 31, 2710 11 41 to 2710 11 90, 2710 19 21 to 2710 19 29, 2710 19 41 to 2710 19 49, 2710 19 61 to 2710 19 69 of the 2004 version of the CN), when they are intended to be used for purposes other than as motor fuel, heating fuel or motor fuel additives, where the person who has been granted authorisation by the local tax administrator, in the manner prescribed by the central tax administrator, to purchase energy products excise duty exempt (hereinafter in this paragraph referred to as the authorisation): 3.1. purchases them from a tax warehouse of the Republic of Lithuania; or 3.2. purchases them from another person holding the authorisation; or 3.3. receives them from another Member State; or 3.3. imports them. 4. In the case specified in paragraph 3 of these Rules, no excise duty shall be levied if an authorisation proving the buyer’s right to acquire energy products excise duty exempt is produced to the authorised warehouse keeper, to a holder of the authorisation or to the appropriate territorial customs, or, where the authorised warehouse keeper or the person who receives energy products from another Member State himself uses the energy products for purposes other than as motor fuel, heating fuel or motor fuel additives, if the person holds the authorisation issued in his name. 5. No excise duty shall either be levied on energy products referred to in paragraph 3 of these Rules, released from a duty suspension arrangement, or sold or otherwise transferred by a holder of the authorisation, or imported or purchased (brought

1. in)from another Member State and packaged for retail sale. 6. The authorisation may be issued (indicating the purpose thereof) to persons who: 6.1. are engaged in the business of packaging the products referred to in paragraph 3 of these Rules for retail sale; and/or 6.2. regularly use the products referred to in paragraph 3 of these Rules for purposes other than as motor fuel, heating fuel or motor fuel additives, i.e. for technical, production and similar purposes; and/or 6.3. are engaged in the business of sale of energy products referred to in paragraph 3 of these Rules, i.e. sell them to a holder of the authorisation to use energy products for purposes specified in subparagraphs 6.1 and/or 6.2 of these Rules. 7. Persons who have sold or otherwise transferred, excise duty exempt, energy products referred to in paragraph 3 of these Rules, also persons to whom such products (with the exception of products packaged for retail sale) have been sold or otherwise transferred shall maintain records of sale (or use, as the case may
2. be)of energy products on which no excise duty has been levied, referred to in paragraph 3 of these Rules, as prescribed by the central tax administrator. II. APPLICATION OF THE EXCISE DUTY EXEMPTION LAID DOWN IN ARTICLE 41

(4)OF THE LAW 8. No excise duty shall be levied on energy products listed in Annex 2 of the Law (except for energy products specified in the CN under the headings 2710 11 31, 2710 11 41 to 2710 11 90, 2710 19 21 to 2710 19 29, 2710 19 41 to 2710 19 49) after release from the duty suspension arrangement in the Republic of Lithuania, acquired (brought in) for business purposes from another Member State or imported where these are intended for purposes specified in Article 41

(4)of the Law, if documents certifying the person’s right to engage in the business of electricity generation are produced to the authorised warehouse keeper, to a registered or non-registered trader or to the territorial customs. 9. No excise duty shall be levied on energy products specified in paragraph 8 of these Rules, acquired (brought in) from another Member State by a registered, non-registered trader or any other person for business purposes, if such products are used by such person for the purposes specified in Article 41

(4)of the Law and if such person has the right to engage in the business of electricity generation. III. APPLICATION OF THE EXCISE DUTY EXEMPTION LAID DOWN IN ARTICLES 41

(5)– 41

(7)OF THE LAW 10. No excise duty shall be levied on energy products listed in Articles 41

(5)– 41

(7)of the Law after release from the duty suspension arrangement in the Republic of Lithuania or acquired (brought in) for business purposes from another Member State or imported, provided that the conditions specified in the above-mentioned Articles are met. IV. APPLICATION OF EXCISE DUTY EXEMPTION LAID DOWN IN ARTICLE 41

(8)OF THE LAW 11. No excise duty shall be levied on energy products brought into the Republic of Lithuania from another Member State and meeting the conditions specified in Article 41

(8)of the Law if the products are used by the same motor vehicle in which they have been brought in.

1. No excise duty shall be levied on energy products imported to the Republic of Lithuania in built-in fuel containers of commercial passenger and cargo motor vehicles, including tractors and trailers, (including gas containers fitted in a vehicle as an integral part of gaseous fuel equipment) provided for in the manufacturer’s technical specification, from where the energy products are fed directly to the built-in fuel supply systems of motor vehicles or used in cooling or other systems if these energy products are used by the same motor vehicle in which they have been imported. V. FINAL PROVISIONS
2. In the circumstances deemed by the tax administrator justified, the tax administrator shall have the right to demand that persons holding the authorisation specified in paragraph 6 of these Rules, also persons referred to in paragraph 8 of these Rules delivered a surety (guarantee) to secure the payment of excise duty should energy products exempted from excise duty be used for purposes other than those for which the Law grants excise duty exemptions.
3. Excise duty paid in the Republic of Lithuania on energy products used for the purposes specified in Articles 41

(3)– 41

(7)of the Law shall be refunded in the manner prescribed by the Minister of Finance. ––––––––––––––––