LAW LAW ON TAX ADMINISTRATION OF THE REPUBLIC OF LITHUANIA Chapter I G

LAW LAW ON TAX ADMINISTRATION OF THE REPUBLIC OF LITHUANIA Chapter I GENERAL PROVISIONS Article

Purpose of the Law This Law shall establish the basic principles and regulations which must be observed in implementing the tax laws of the Republic of Lithuania, furnish a list of taxes applied in the Republic of Lithuania, establish the rights and duties of the tax administrator, rights and duties of the taxpayer, the procedure of tax computation and payment, collection of taxes and amounts thereof, as well as the dispute settlement procedure. Article
Basic Concepts Concepts employed within the tax law, if the tax law does not stipulate otherwise: tax denotes monetary obligation owed by the taxpayer to the state, established within the tax law in order that funds may be obtained to fulfil state (municipal) functions; charge and fee indicate a monetary duty established by law, exacted from a taxpayer for certain services provided for him by state institutions. Charges and fees shall constitute an additional source of income for fulfilment of state (municipal) functions; tax law is a law of the Republic of Lithuania which establishes the tax, charge or fee, or other payment into the state (municipal) budget and also this Law and the agreement mentioned in Article 4 of this Law; person is a natural person (individual), a legal person, or an entity which does not possess the rights of a legal person; taxpayer is a person, for whom an obligation to pay taxes is established under the tax law; charge and fee payer indicates a person, who is obliged to pay a charge or fee, established by laws, for services rendered by state institutions; tax administrator is an institution which is responsible for tax administration; tax administration comprises the implementation of the rights and obligations of the tax administrator, as well as rights and obligations of the taxpayer, calculation of taxes, payment and collection, application of liability for improper calculation and payment of taxes, distribution of taxes and supplying of information for taxpayers; tax return indicates a document of tax calculation, which must be completed and filed with the tax administrator by the taxpayer or tax withholder according to the procedure established by the tax law; tax arrears indicates amount of tax not paid on time according to the procedure prescribed by the tax law, by the taxpayer or tax withholder; tax overpayment indicates amount of tax paid by the taxpayer or withholder in excess of the tax amount prescribed by tax law procedure; a tax amount, which in the course of verification is adjudged as too high by the tax administrator, is also considered an overpayment; tax calculation is the filling out of a tax return or another document by indicating, in monetary terms, the tax amount required to be paid into the state (municipal) budget; tax base is an object, which is appraised to be subject to taxation according to the procedure established by tax law, to which an established amount of tax (rate) is applied; tax withholder is a person, for whom an obligation has been assigned, according to tax law, to withhold tax from the taxpayer and pay it into the state (municipal) budget; tax law violation is the result of action which contradicts the tax law; tax procedure includes the taxpayer, tax base, tax amounts (rates), tax reliefs, penalties and interest, and tax payment as well as withholding regulations, established by the tax law; tax relief denotes special taxation conditions established for the taxpayer, requiring the payment of a lesser tax, or deferral of tax payment deadline, or permitting tax payment to be paid in several instalments; activity denotes all activity of a person, as a result of which a person could have received, or has received some income. Article
Taxpayer Equality In applying tax laws, all taxpayers shall be held equal on the basis of the conditions established by these laws. Article
International Agreements If taxation regulations established by international agreements differ from those in tax laws and these agreements have been ratified in the Republic of Lithuania, international agreement regulations shall apply. Chapter II Taxes Article
Taxes
The following taxes shall be administered in accordance with this Law: 1) value added tax; 2) excise tax; 3) natural persons' income tax; 4) legal persons' profit tax; 5) enterprise and organisation immovable property tax; 6) land tax; 7) state natural resources tax; 8) oil and gas resources tax; 9) pollution tax; 10) consular duty; 11) stamp duty; 12) market place duty; 13) deductions from sales revenue under the Law on Road Stock of the Republic of Lithuania; 14) inheritance or gift tax; 15) compulsory health insurance contributions (Amended 6 June 1996).
Only an appropriate tax law, or a decree by the Government of Lithuania based on such, or another legal act passed on the basis of such shall determine the procedure for imposition of certain taxes.
This Law shall not apply in administering customs duties and social insurance payments. Article
Implementation of Tax Law
The Government of the Republic of Lithuania and, if an authorisation is given, the Ministry of Finance shall implement the tax laws passed by the Seimas of the Republic of Lithuania as well as this Law. No other state institution may be assigned implementation of tax laws, except the Ministry of Finance, if this is not provided for in the tax law.
In the course of implementing tax laws, the Government of the Republic of Lithuania shall establish appropriate methods and regulations, ensuring tax administration, or shall task the Ministry of Finance to carry this out.
No subordinate legislation regarding questions of tax procedure establishment, listed in part one of Article 5 of this Law, may be adopted without the consent of the Minister of Finance. Article
Tax Administrators
The State Tax Inspectorate shall administer taxes listed in part one of Article 5 of this Law.
The Customs of the Republic of Lithuania shall also administer the taxes listed in part one and two of Article 5 of this Law, however only insofar as it is authorised under the Value Added Tax and Excise Tax Laws of the Republic of Lithuania.
The Environmental Protection Ministry shall also administer the taxes listed in Paragraphs 7, 8, and 9 of part one of Article 5 of this Law, however only insofar as it is authorised according to Tax on State Natural Resources, Tax on Pollution and Tax on Oil and Gas Resources Laws. Chapter III STATE TAX INSPECTORATE Article
State Tax Inspectorate
The State Tax Inspectorate is a state institution founded at the Ministry of Finance which is financed from the state budget and other funds and is accountable to the Minister of Finance. The State Tax Inspectorate is a legal person having its own bank account, seal and symbols.
In order to reinforce the material base of the State Tax Inspectorate and provide material incentives for staff, an additional sum of 30 percent shall be allotted from funds exacted in the course of verification. 75 percent of the amount shall be allotted for reinforcement of the material base of the State Tax Inspectorate, while the remaining funds shall be utilised for incentives and social guarantees of the tax inspectorate staff.
The State Tax Inspectorate is guided by The Constitution of the Republic of Lithuania, this and other laws, subordinate legal acts and regulations approved by the Government.
The State Tax Inspectorate shall work in co-operation and exchange information with all tax administrators, state institutions and foreign state institutions, which administer the payment of taxes. Article
Structure of State Tax Inspectorate
The State Tax Inspectorate is comprised of: 1) State Tax Inspectorate at the Ministry of Finance - the central tax administrator; 2) State Tax Inspectorates at the Ministry of Finance territorial state tax inspectorates - local tax administrators.
The local tax administrator shall be held subordinate and accountable to the central tax administrator. Article
Central Tax Administrator's Work Organisation
The State Tax Inspectorate at the Ministry of Finance shall be headed by a chief who shall be appointed and relieved of his duties by the Prime Minister of the Republic of Lithuania upon recommendation of the Minister of Finance. The chief of the State Tax Inspectorate at the Ministry of Finance shall be accountable to the Minister of Finance.
The structure of the State Tax Inspectorate at the Ministry of Finance shall be approved by the chief of the Inspectorate on coordination with the Minister of Finance. Article
Local Tax Administrator's Work Organisation
Upon recommendation of the chief of State Tax Inspectorate at the Ministry of Finance, the Minister of Finance shall establish the number of local state tax inspectorates, as well as their zones of territorial activity.
Chief of the territorial state tax inspectorate shall approve the structure of the territorial state tax inspectorate, taking into account the methodical instructions and recommendations of the central tax administrator.
The chief of the State Tax Inspectorate at the Ministry of Finance shall appoint and relieve of his duties the chief of the territorial state tax inspectorate. The chief of the territorial state tax inspectorate shall be held accountable to the chief of the State Tax Inspectorate at the Ministry of Finance. Article
State Tax Inspectorate Employees
State Tax Inspectorate employees shall be engaged and dismissed from work by the chief of the tax inspectorate, which employs them.
The central tax administrator shall set requirements, according to which State Tax Inspectorate employees shall be selected and also the procedures according to which employees may be appointed to higher level positions and their salaries may be increased. These requirements must be connected only with the tax inspectorate employees' ability to complete work in accordance with approved job instructions and position occupied. Article
Work Compensation and Social Guarantees of State Tax Inspectorate Laws of the Republic of Lithuania and subordinate legislation shall establish the State Tax Inspectorate employee work and salary conditions and social guarantees. Article
Organisation of Information Supply to Taxpayers
The central tax administrator shall organise supply of information for taxpayers on tax laws and other legislation relevant to tax questions and create programs to educate taxpayers. The purpose of this work is to assist taxpayers in the observance of tax laws and subordinate legislation.
The central tax administrator shall organise taxpayer education regarding tax law issues and other legislation which regulates tax payment procedure. Article
Tax Administrator's Organisation of Employee Training The central tax administrator shall organise training (qualification improvement) of State Tax Inspectorate employees in accordance with training programs prepared for that purpose. Chapter IV Rights and Obligations of Tax Administrator Article
Duties of Tax Administrator
The tax administrator shall: 1) keep records of taxpayers' and other payments into the state (municipal) budget; 2) control computation of payments into the state (municipal) budget, exact interest for late payment and penalties imposed in accordance with tax laws, and also refund overpayments and wrongly exacted taxes, interest and penalties; 3) implement municipal decisions regarding provision of reliefs of taxes, collections and deductions into the budget; 4) apportion taxes and other payments into state and municipal budgets; 5) organise accounting, valuation and sales of confiscated, ownerless, state-inherited property and wealth, as well as property, wealth and treasures transferred and included into the state's revenues; 6) publish legislation or prepare its drafts for implementation of tax laws with the authorisation of the Seimas, the Government and the Ministry of Finance of the Republic of Lithuania; 7) give explanations to taxpayers regarding tax payment issues; 8) prepare and provide for the Minister of Finance drafts of tax laws and decrees of the Government of the Republic of Lithuania, and other proposals concerning taxation procedure improvement; 9) conduct inquiry according to his competence; 10) fulfil obligations prescribed by other laws.
The local tax administrator shall carry out the duties prescribed in paragraphs 3 and 4 of part one of this Article, while the central tax administrator shall carry out those contained in paragraphs 6 and
Both the local and central tax administrators shall carry out the duties prescribed in all the other paragraphs. Article
Rights of Tax Administrator
Tax administrator's officers shall have the right to: 1) obtain from enterprises, institutions and organisations as well as other persons, including banks and other credit and finance institutions, information required in the performance of their duties and copies of documents concerning property and income of legal, natural persons, or persons without the rights of a legal person under examination; 2) enter without prior notice, upon presentation of official certificate, a person's production premises (including rental premises) or territory, in order to establish how the person is fulfilling his tax liabilities and to verify the material and technical resources used for activity and the finished products. The tax administrator's officer shall also have this right in instances when residential premises and other facilities are employed for the purpose of activity and income acquisition. Chiefs of enterprises, institutions and organisations as well as natural persons, interfering with the right of the tax administrator's officer to avail himself of this right shall be held liable in accordance with the procedure established by law. To enter, without prior notice, a taxpayer's territory, buildings and facilities (including rental premises) shall be permitted only during the taxpayer's work hours. A taxpayer's consent shall be required in other instances; 3) take temporarily from the taxpayer and keep for a period of up to 30 days, documents necessary to establish the veracity of tax computation having left a document receipt statement, to seal the areas for safekeeping of documents, securities, money and material valuables, to make document copies or excerpts, to mark the taxpayer's documents in order to prevent their falsification; 4) furnish the taxpayer with instructions the fulfilment of which is mandatory regarding issues of tax computation and payment, and other payments to the state (municipal) budget and also on issues of record keeping; 5) recover without suit from individual accounts within banking institutions taxes not paid on time and interest and penalties, as well as other sums belonging to the budget as provided for by laws; 6) issue instructions to banking institutions to cease money disbursement and transfers from enterprise accounts, if they failed to furnish on time to the State Tax Inspectorate returns and other budget payment computations and do not permit investigation of taxes, or if in the course of investigation, facts of income concealment and incorrect tax computation are uncovered; 7) furnish the taxpayer with mandatory instructions on issues of tax computation and payment; 8) compile protocols of administrative violations of law in cases which according to law are attributed to the administrator's competence; 9) perform personally or to require other competent institutions to perform check measurements, stock taking of material valuables and other verification of facts measures, and require that the books be kept properly; 10) install meters and measuring devices within taxpayer storage facilities, production storage areas and other installations used for work; seal and stamp the taxpayer storage facilities, premises and equipment; close off the area or sections thereof; 11) temporarily suspend the work of individuals, if they avoid to furnish the tax administrator with the documents required in connection with tax computation and payment, or if some violations of tax laws outlined in Articles 47, 48 and 49 of this Law occur; 12) obtain from the taxpayer returns and explanations relevant to sources of property acquisition; 13) assign, in accordance with the procedure established by laws, administrative sanctions and penalties provided for by tax laws and also calculate the amount of interest; 14) address the heads of all types of enterprises, institutions and organisations concerning the circumstances and conditions interfering with the tax administrator's proper performance of duties. Enterprise heads and other officers must investigate the tax administrator's directives and inform without delay (no later than on the day following receipt of the directive) the administrator of the measures adopted; 15) impound taxpayer and tax withholding person's property and bank accounts, if taxes have not been paid (transferred) according to the procedure established by the tax law; 16) possess, carry and use a service firearm, in accordance with the procedure established by the Government of the Republic of Lithuania.
The tax administrator shall possess the rights specified in this Article also with respect to the person withholding the tax.
The tax administrator's officer may avail himself of the rights provided by other laws and legislation as well as the rights provided by decrees of the Government of the Republic of Lithuania to an officer of the tax administrator. Article
Recording of Tax Administrator and his Officer's Actions In implementing the rights accorded him by law and in performance of his duties, the tax administrator or his officer shall register performed actions through decisions, whose forms (act, certificate, directive, recommendation, explanation, decision, warning, etc.) and filling procedure shall be established by the central tax administrator. Chapter V TAXPAYER AND TAX WITHHOLDER'S RIGHTS AND OBLIGATIONS Article
Payment of Taxes
The taxpayer shall pay only the taxes prescribed by tax laws, observing the tax laws and also the tax computation and payment procedure established by this Law.
The tax withholder shall withhold the tax and transfer it in accordance with the procedure established by laws and other standard acts. Article
Accumulation and Furnishing of Information
The taxpayer, tax withholder must keep books according to the procedure established by law, issue the required documents and furnish other information, needed by the tax administrator, to fill in and file a tax return or through some other means inform the tax administrator regarding tax computation and payment.
If the taxpayer, the tax withholder does not have the documents (or has lost them), required for the computation of tax, they must prepare them within the period prescribed by the tax administrator.
The taxpayer, tax withholder must, according to the established procedure, furnish their address (action location) and work hours to the tax administrator, and in the event of changes in the data inform the tax administrator within a period comprising no more than 5 work days. Article
Right To Information The taxpayer, tax withholder, having submitted a request to the tax administrator, shall have the right to obtain standard documents, as well as other information required to implement the tax law. Article
Confidentiality of Information Concerning the Taxpayer
Information concerning the taxpayer which is supplied to the tax administrator or his officer must be held in confidence and used solely for the purposes established by the tax law.
The tax administrator's officer maintains confidentiality of information concerning the taxpayer also after terminating his work contract with his employer, with the exception of instances provided for by this Law.
Information concerning the taxpayer may be disseminated: 1) to another tax administrator or his officer, if that is required in the administration of the same or other tax; 2) to courts, law enforcement and other institutions in instances provided for by law; 3) on the basis of international agreements to tax administrator of a foreign country based on a written request; 4) when guilt of the taxpayer for violations of the tax law has been proven or when the taxpayer has not registered a complaint against the actions of the tax administrator within the established period of time and in accordance with the established procedure. In this instance information concerning the taxpayer may be released insofar as this concerns the violation of tax law; 5) information concerning a taxpayer may also be disseminated based on the presence of the taxpayer's written consent or request.
The recipient of the information in accordance with paragraphs 1, 2, and 3 of part three of this Article must keep it confidential.
If the tax administrator has disseminated false information about the taxpayer in instances specified in part three of this Article, he must correct the error as soon as he becomes aware of this fact.
If the tax administrator disseminated information to the tax administrator of a foreign country, according to paragraph 3 part three of this Article, the taxpayer must be advised of this.
The tax administrator and also any person who was privileged to confidential information concerning a taxpayer shall be held responsible for the dissemination of this information in accordance wih the procedure established by laws, except in instances when the laws permit dissemination of such information.
The requirements of this Article shall also be applied to the tax withholder. Chapter VI TAX COMPUTATION, PAYMENT, EXACTION, AND REFUND Article
Tax Return Requirements
Every tax return filed by the taxpayer with the tax administrator must conform to the established form. The tax return shall be filed at the prescribed time and only with the tax administrator for whom it is designated.
The requirements specified in part one of this Article shall also apply to the tax return which the person withholding the tax must file with the tax administrator.
The forms and filling in procedure of the tax return or other documents, indicating tax liability, shall be established by the central tax administrator on the basis of tax laws. Article
Computation (Recomputation)Period
Unless otherwise prescribed by the tax law, tax may be computed or recomputed to cover a period not to exceed the preceding five calendar years for which a tax return had to be filed with the tax administrator.
If, according to the tax law, there is no requirement to file a tax return with the tax administrator the tax may be computed or recomputed no later than during the course of the fifth year following the calendar year, during which the tax should have been, or has been paid.
If the taxpayer fails to file a tax return or files a faulty tax return or otherwise avoids payment of tax and unless the tax law provides otherwise, the tax may be computed or recomputed for the period not exceeding the past ten calendar years, for which a tax return should have been filed with the tax administrator. This regulation shall also apply to the person withholding the tax. Article
Tax Reliefs Only an appropriate tax law regulating the procedure of tax computation shall determine tax relief/s. Temporary tax reliefs may also be established by special laws passed by the Seimas of the Republic of Lithuania. Article
Proof of Accuracy of Tax Computation
In instances where the taxpayer fails to agree with the tax sum computed by the tax administrator, he must prove that the calculated sum is incorrect.
If the taxpayer fails to have the accounting documents in his possession, totally fails to keep accounting or if it is established that the documents have been falsified, and also if he fails to submit to the tax administrator the required information, the tax administrator shall have the right to impose taxes on the taxpayer by applying indirect methods. In this eventuality the taxpayer shall be required to prove that the tax has been incorrectly calculated.
An indirect method of taxation involves regulations which are established by the Government of the Republic of Lithuania and ways of establishing a tax base in the eventuality when the taxpayer and the tax withholder do not have accounting documents, do not keep the documents, has not all of the documents needed by the tax administrator, and also when accounting documents are not genuine or are falsified, or when due to other causes efforts to establish a tax base in accordance with the procedure established by law prove unsuccessful.
If a great disparity or inconsistency with the established norms exists between the taxed income, or the income declared by the taxpayer, or the income proven through other means on the one hand and the property acquired by the taxpayer or other expenses incurred by him which are indicated by a large amount of consumption elements on the other, the tax administrator shall have the right to tax the taxpayer with such an established sum of income which according to his computations is required to acquire such property or consumption elements. In this case it is the taxpayer who must prove that the tax is determined incorrectly.
The consumption element signifies the sum total of material and non-material goods suitable for short or long-term consumption.
In cases when a taxpayer fails to file a tax return with the tax administrator in accordance with the procedure established by law, the tax administrator himself shall assess the amount of tax owed by the taxpayer. This amount of tax liability shall be determined (assessed) in accordance with one of the methods cited below: 1) based on information concerning the taxpayer that the administrator possesses from earlier returns filed with him by the taxpayer or other documents, or based on other information obtained from individuals involved in the same or similar activity; 2) based on every other piece of information which the tax administrator possesses concerning the taxpayer. Article
Filing of Data and Information with the Tax Administrator
While settling mutual accounts and making cash payments for goods and services to foreign entities (except natural persons), enterprises, institutions and organisations of all types which have been registered in the Republic of Lithuania must file with the local tax administrator, in accordance with the procedure established by the Ministry of Finance, data on the amount in excess of 10,000 Lt paid out per day to one economic entity. If the amount is paid out to a foreign economic entity in foreign currency it shall be calculated according to the official litas rate of the day and the litas exchange rate announced by the Bank of Lithuania.
The data specified in Par. 1 hereof shall be filed with the tax administrator in whose territory of activities the economic entity that has received income is registered, within 10 days after the close of the month when the amounts have been paid out. Data on the amounts paid out to foreign entities shall be filed with the central tax administrator.
In case of failure to file with the tax administrator the data specified in Par. 1 hereof, interest at the rate of 0.2 on the undeclared amount but not in excess of the triple amount paid out shall be exacted from enterprises, institutions and organisations for each day that the data remains unfiled. Amounts of interest for failure to timely file the required data shall be transferred into the state budget.
Commercial banks must by the 5th day of every month furnish the central tax administrator with information on all types of accounts opened and closed by economic entities in the previous month.
Furnishing of incorrect information concerning the opened accounts or failure to furnish information shall make the managers of commercial banks liable in accordance with the procedure established by the Code of Administrative Violations of Law (Amended 13 June 1996). Article
Verification of Tax Computation and Payment
Having completed verification, the tax administrator's officer/s shall draw up an act signed by the officer/s who have conducted the tax verification, as well as by the head of the verified enterprise, institution, organisation and the chief finance officer (accountant) or natural person.
Refusal to sign the verification document (act) shall not exempt the taxpayer from the payment of taxes, interest or penalties.
Officers of the tax administrator shall independently select taxpayers subject to verification and determine the scope and time of verification.
The taxpayer and the person withholding the tax shall be obliged to provide suitable working conditions for tax administrator's officers, to furnish all documents required to carry out tax computation and correct payment verification. Article
Tax Distribution
Taxes and other payments into the state (municipal) budget shall be distributed as prescribed in the Law on Budgeting of the Republic of Lithuania and tax laws. In the absence of indication as to where taxes or other sums belonging to the budget are to be accumulated they shall be included into the state budget.
Income from interest and penalties for late payment, underpayment or total non payment of taxes shall be accumulated in like fashion as taxes for the improper payment of which interest or penalties had been computed. Article
Tax Payment And Exaction
The tax law shall establish the tax payment period.
The unpaid amounts of money, brought to light during verification by the tax administrator and the computed penalties must be paid no later than within a period of 20 days from the date the taxpayer had become aware of this.
The statute of limitations shall not be applied to the payment and exaction of computed tax. The above regulation shall also apply with respect to imposed interest and penalties.
Longest overdue taxes shall be paid (exacted) first, followed by penalties and last, by interest. Article
Warning on Voluntary Payment of Taxes
Having established the extent of a taxpayer's indebtedness and availing himself of his right to exact the unpaid tax, as well as other amounts related to tax payments (interest, penalties) by obligatory means, the tax administrator, prior to commencement of carrying out his obligation, shall send the taxpayer a warning urging him to pay the tax and other amounts related to improper payment of tax voluntarily.
The warning urging voluntary payment of tax and other amounts, connected to improper tax payment must contain: 1) name of tax administrator; 2) name of taxpayer; 3) date of issuance of warning to taxpayer; 4) taxpayer's identification number; 5) payable amount of tax and amounts in connection with it (interest, penalties); 6) period during which the taxpayer must voluntarily pay the amounts indicated in the warning; 7) account into which the stated amounts must be paid; 8) warning indicating that, in the event the amount specified in the warning is not paid voluntarily, these sums will be forcibly exacted.
If there exists a danger that the taxpayer may conceal his property, sell it or lose it by other means, the tax administrator's officer shall have the right to impound the taxpayer's property at the same time as he presents the warning to the taxpayer.
The tax administrator shall set a period of no less than fifteen and not to exceed thirty days from the date of issue of warning, during which the sums indicated in the warning must be paid.
In the event that the taxpayer refuses to accept the warning, or he is not located at his registered office, the person delivering the warning indicates this on the warning and returns it to the tax administrator. The person delivering the warning and a witness confirm the written entry concerning the taxpayer's refusal to accept the warning and the confirmation of his motives for refusal. The taxpayer's refusal to accept the warning shall be held tantamount to the warning having been given to him. The warning shall also be considered delivered in the event that the taxpayer is not located at his registered office at the address indicated by him and during his working hours, on two occasions. Article
Tax Administrator's Right To Exact Taxes from Taxpayer's Property
In the event the taxpayer fails to pay taxes or other amounts in connection with proper payment of taxes (interest, penalties) specified in the tax administrator's warning, the tax administrator shall acquire the right to exact the tax from the taxpayer's property towards which recovery may be directed in accordance with the Code of Civil Procedure of the Republic of Lithuania.
The right to exact taxes from the property of the taxpayer shall be acquired on the day following the expiration of the period specified in the warning regarding voluntary fulfilment of tax liabilities.
The right to exact taxes from the taxpayer's assets shall disappear on the day the taxpayer pays the tax arrears as well as amounts in connection with it. Article
Impounding of Taxpayer Property Impounding of a taxpayer property or funds constitutes distraint of property or funds and prohibition from disposing of them, regardless of in whose possession this property or funds were kept on the day of impounding. This shall be made official by an act of impounding. Article
Distraint of Taxpayer Property
The tax administrator shall distrain the taxpayer's property up to the amount necessary to cover taxes and amounts related to them (interest, penalties) and to cover the expenses connected with the enforcement of payment.
The tax administrator may seal the distrained articles.
Taxpayer's property shall be distrained in the presence of a budgetary debt. The taxpayer's property shall be distrained in the presence of the taxpayer himself, while in cases when the taxpayer is not a natural person, in the presence of the taxpayer's employees responsible for the correct filling in of the tax return.
During the distrainment process the taxpayer shall have the right to inform the tax administrator as to which articles the enforcement of payment should be directed first of all. The tax administrator must satisfy such a declaration if that does not violate the administrator's interests and does not interfere with exaction of taxes and related amounts. Article
Contents of Act of Property Impounding
An act of property impounding must indicate: 1) date and place of the drawing up of the act; 2) names of tax administrator's officer and also of persons who were participants in the drawing up of the act; 3) the first and last names (titles) of tax administrator's officer and taxpayer; 4) identification of every object described, its identifying characteristics (weight, size, degree of depreciation, and other characteristics), value assessment of every object and the total value of impounded property; 5) attestation that all articles have been placed under seal, if that has been the case; 6) list of all articles transferred over to another person for safekeeping; 7) person to whom property has been handed over for safekeeping, and his address, if the taxpayer himself has not been assigned to protect his property; 8) entry indicating that the taxpayer and other persons have been notified that the taxpayer or the property keeper have been explained their obligations and liability in connection with safekeeping, as established in Article 4141 of the Code on Civil Procedure of the Republic of Lithuania; 9) comments and statements of taxpayer and other individuals participating in property distrainment, and also tax administrator's directions concerning such.
As necessary, found articles against which under law no payment enforcement action may be directed, as well as other articles which shall not be impounded shall be listed in the act of property impounding.
An officer of the tax administrator, keeper of property, the taxpayer and other persons participating in the impounding of this property shall sign the property impounding act. Article
Assessment of Impounded Property The officer of the tax administrator shall assess the impounded property according to local prices, taking into consideration depreciation of the property. In the event that assessment of certain of the articles is difficult and also if the taxpayer is challenging the assessment carried out by the tax administrator's officer, the tax administrator shall call in an expert to decide the value of the property. Article
Protection of Impounded Property
The tax administrator shall turn over in writing the impounded property into the taxpayer's or another person's care. They shall be presented a copy of the property impoundment act.
The keeper (if he happens to be someone other than the taxpayer) receives compensation in accordance with the established valuation. In addition, he is being compensated for necessary expenses incurred in property safekeeping, at the same time taking into account the benefit received by him.
The tax administrator shall turn over to custody of the banking institution serving him currency, securities, precious metal bars, schlich, nuggets, manufactured and laboratory type semi-manufactures and other handicrafted wares, diamonds and also jewellery and other everyday manufactured gold, silver, platinum and platinum metal variety articles, precious stones, pearls and the scrap thereof.
Embezzlement, transfer or concealment of property handed over for custody, or destruction or damage thereof shall incur criminal liability for the custodian.
The custodian shall be in every instance held liable by way of his property for the loss, defficiency or damage of the property handed over to him for custody. Article
Enforcement of the Payment of Tax and Related Amounts
Having drawn up the act of property impoundment the tax administrator shall adopt a decision concerning exactions and hand it over to court bailiffs along with the property impoundment act for its enforcement according to the procedure established by law.
The decision concerning exactions for the budget shall be handed over to court bailiffs in accordance with the procedure established by the Code of Civil Procedure of the Republic of Lithuania. The decision concerning exactions for the budget shall be handed over to the court bailiffs only following termination of the process of appealing the tax administrator's actions as provided for by Chapter X of this Law, or in instances when the time limit for submittal of complaint has been exceeded.
Every individual in whose possession the impounded property of the taxpayer is held may not perform any actions with regard to the taxpayer's property (neither issue payments from this property, nor transfer such to anyone else), with the exception of carrying out directives of the tax administrator.
The bank may not open a new account and may not make any disbursements from the impounded account for the individual whose account at the bank has been impounded by the tax administrator, with the exception of disbursements made in accordance with directive from the tax administrator. Account impounding shall not constitute an obstacle to funds reaching (being added on to) the individual's account. Article
Tax Refund
The amounts of tax which are returned by the tax administrator to the taxpayer shall be taken from the budget or budgets, into which they had been paid and in the proportions according to which they had been paid in.
Other amounts related to the tax refund shall be refunded according to the same procedure as the tax.
A request for refund of an overpayment in tax may be submitted within two calendar years following the year in which the tax was paid, unless an appropriate tax law provides otherwise.
The request must be submitted in writing to the tax administrator to whom the tax overpayment was made. The request shall state the amount of overpayment and basis for refund.
The tax administrator shall refund the overpaid tax amount to the taxpayer within 30 days following the receipt of a written request concerning the tax refund. The tax administrator who fails to refund the tax overpayment within the specified period shall add interest to the taxpayer's account until the overpaid tax amount is refunded. The interest amount shall be equivalent to the amount of the penalty set for late tax payment reduced by up to 15 points.
The tax administrator may, within a 30-day period from the day of receipt of the request, credit an overpayment of tax against any other tax liability (including penalties and interest), even though this is not specified in the written request submitted by the taxpayer. The tax administrator who fails to credit the overpaid amount of tax and apply it against other liability with respect to tax (including interest and penalties) within the prescribed time limit shall asses interest in favour of the taxpayer in accordance with the same procedure, as that applied for untimely refund of overpayment. The tax administrator shall have that right even in the absence of a written request of the taxpayer.
If the individual withholding the tax transfers too high a tax amount into the state (municipal) budget, the overpaid tax amount shall not bear interest, but the overpayment shall be refunded within a 30-day period from the receipt of request. Article
Interest
Interest shall be imposed for late payment or transfer of declared tax to state or (municipal) budget, regardless of reasons as a result of which the tax was not transferred to the state (municipal) budget on time.
Calculation of interest shall commence from the day following the date when the tax was due to be paid or transferred to the state (municipal) budget, and shall be terminated on the day of payment of tax (transfer) inclusive.
The Minister of Finance shall establish the amount of interest for late payment of tax and the procedure according to which the interest shall be paid and calculated, taking into account the average interest rate of the last calendar quarter paid for government bonds issued for a term not to exceed one year and increased by up to 10 points.
From the taxpayer or individual withholding the tax who fails to pay the interest according to the established procedure interest shall be exacted according to the same procedure as unpaid taxes.
Payment of interest shall not exempt a person from the payment of tax.
Interest shall be assessed and collected in accordance with the procedure established by this Article for failure to pay within the set period of tax amounts additionally disclosed by the tax administrator's officer/s and the penalties imposed by such. Article
Exception to Chapter VI
Provisions of this Chapter shall not apply to those taxpayers from whom the tax is withheld and paid into the state (municipal) budget by a tax witholder.
If the tax withholder has incorrectly withheld and made a tax payment to the state (municipal) budget, including interest and penalties, these due amounts shall be withheld from the person withholding the tax according to the procedure prescribed in this Chapter. Chapter VII RECORDING OF TAXPAYERS Article
Register of Taxpayers
A general register of taxpayers shall be compiled for the purpose of keeping a record of taxpayers.
The tax administrator shall register all persons whose registration is mandatory under Article 43 of this Law. Article
Registrars of Taxpayer Register
The Minister of Finance shall be the founder of the taxpayer register and the tax administrator shall be the registrar thereof.
The central tax administrator shall keep the general tax register.
The local tax administrator shall register taxpayers and keep the registration documents of the territory.
The taxpayer register must be managed in such a way as to be co-ordinated with other state registers and classifiers. Therefore the tax administrator shall cooperate with the keepers of state registers and classifiers. Article
Registration of Taxpayers and Tax Withholders
A person who, according to the law on tax, is liable to taxes, must register with the corresponding local tax administrator as a taxpayer.
Every natural person working under an employment contract shall register with the local tax administrator through his employer.
Every tax-withholding person must register with the local tax administrator and submit a list of taxpayers from whom he withholds a tax, in accordance with the established form and procedure. Article
Time Period for Registration of Taxpayers A person who is made liable to a tax under a law on tax must register with the corresponding tax administrator no later than within a period of 5 days from the imposition of the liability. Legal registration of a person shall constitute the moment of inception of liability and in the event that legal registration is not provided for by law, by the commencement of activities. Article
Tax Payer Identification Number
Every taxpayer or tax withholder must possess a permanent identification number making it possible to identify the taxpayer or the tax withholder, regardless of who shall administer the tax.
The Legal Unit Register Identification Code shall apply to enterprises and organisations, while the Population Register Personal Code shall apply to natural persons.
A temporary taxpayer identification number shall be allocated for taxpayers who for some reason may not use the Legal Unit Register Identification Code or the Population Register Personal Code, the procedure of application whereof shall be established by registrar of the taxpayer register. Article
Regulations of Taxpayer Registration and Register Keeping Procedure The Minister of Finance shall establish taxpayer registration regulations and procedure of register keeping, upon recommendation of the central tax administrator. Chapter VIII TAX LAW VIOLATIONS Article
Failure to Meet a Tax Liability by Reason of Negligence Failure to meet a tax liability by reason of negligence shall be deemed present in instances when a taxpayer or a tax withholder pays (transfers) into the state (municipal) budget less than 100%, but more than 85% of the tax imposed by law. Article
Failure to Meet a Tax Liability by Reason of Gross Negligence Failure to meet a tax liability by reason of gross negligence shall be deemed present in instances when a taxpayer or tax withholder pays (transfers) into the state (municipal) budget less than 85% of the tax which he had to pay (transfer) in accordance with the laws. Article
Persistent Tax Law Violations
Repeated, systematic or deliberate violation of tax laws shall be considered as a persistent tax law violation.
A persistent tax law violation shall be deemed as such if : 1) the taxpayer or tax withholder committed the actions specified in Articles 47 and 48 of this Law, twice within the course of three calendar years; 2) the taxpayer or tax withholder committed actions specified in Articles 47 and 48 of this Law, three or more times, regardless of over what period of time this was accomplished; 3) the person is negligent in keeping the books of an enterprise, institution and organisation, if this has made it totally or partly impossible to establish the results of an enterprise, institution, or organisation's activity and commercial, economic, and financial condition or to evaluate its property; 4) the person keeps books of an enterprise, institution or organisation in a fraudulent manner, conceals, destroys or loses accounting documents, if this has made it totally or partly impossible to determine results of the enterprise, institution, organisation's commercial, economic and financial condition or to evaluate its property. 5) the person records false information concerning his income or the use thereof in the tax return filed with the tax administrator; 6) the person fails to file a tax return with the tax administrator or files it belatedly, if he had previously been given an administrative penalty for an identical violation; 7) the person fails to keep accounting documents; 8) the person refuses an officer of the tax administrator access to accounting documents; 9) the person fails to appear before the tax administrator at the appointed time following receipt of a repeated notice from the tax administrator; 10) the person falsifies documents or submits falsified documents to the tax administrator; 11) the person attempts to obstruct the process of tax determination or collection; 12) the person cooperates with other persons contributing to any of the actions listed herein; 13) the person has failed to register as taxpayer or tax withholder; 14) the person has failed to inform the tax administrator concerning changes of his place of residence and work hours. Chapter IX LIABILITY FOR TAX LAW VIOLATIONS Article
Imposition of Penalties
The tax administrator shall impose a penalty equivalent to the amount of money specified in the order, on the banking (credit) institution which fails to carry out the administrator's instruction to write off the sums of money without suit from the account of taxpayer or tax withholder, regardless of whether or not the account is impounded. The imposed penalty may not be larger than the amount of money in the taxpayer's or tax withholder's account on the day when the bank received the instruction to write off the funds without suit. Payment of penalty shall not relieve the banking institution of complying with the tax administrator's instruction.
In the event that the taxpayer fails to satisfy his tax liability due to negligence (Article 47), he shall be given a penalty equivalent to 50% of the unpaid (not transferred) amount of money.
In the event that the taxpayer fails to satisfy his tax liability due to gross negligence (Article 48), he shall be given a penalty equivalent to 100% of the unpaid (not transferred) amount.
If the tax withholder violates the procedure established by the tax law on tax withholding and transfer into the state (municipal) budget (Article 47), he shall be given a penalty equal to 10% of the amount not withheld or transferred to the state (municipal) budget according to the procedure established by law on tax, while for gross negligence (Article 48), he shall be given a penalty equal to 50% of the amount not withheld or transferred to the state (municipal) budget in accordance with the procedure established by the law on tax.
An administrative or criminal action shall be brought against persons who violate tax laws and commit actions specified in Article 49 of this Law. In cases where the violations specified in Article 49 are committed by a legal person or a person without the rights of a legal person, adminsitrative or criminal action shall be brought against the employees or owners of the economic entity who are responsible for correct computation and payment of tax into the state (municipal) budget. Article
Responsibility of Tax Administrator
A disciplinary or criminal action shall be brought, in accordance with the procedure established by law, against the tax administrator's officers who have violated the laws or they shall be held materially responsible.
Damages incurred by taxpayers resulting from illegal actions of the tax administrator or his officers shall be compensated according to the procedure established by laws of the Republic of Lithuania. Article
Time Limit for Penalty Payments
Penalties imposed by the tax administrator for tax law violations shall be paid no later than within 20 days from the day on which the person was handed in the decision on penalty imposition. The local tax administrator shall have the right to extend, according to the established procedure, this deadline but for no longer than 6 months, the central tax administrator - for no longer than 1 year, and the Government of the Republic of Lithuania - for up to two years.
A penalty which is not paid within the term indicated in part one hereof shall be exacted using the same procedure as that for unpaid tax.
According to time limits established by part one hereof, interest shall also be permitted to be paid in several instalments, however only the interest that have been imposed by the officer of the administrator in the course of examination.
If the sums which have been deferred in accordance with the procedure established in parts one and three hereof are not be paid within the deferred period or only a portion of deferred amounts is paid, the unpaid amounts shall be indexed taking into account the consolidated consumer price index. Indexing shall be undertaken only if during the period of deferment the consolidated consumer price index is no smaller than 1.
Article
Revocation of Permit (License) to Engage in Activities and Cancellation of Export and Import Operations
Officers of the tax administrator may revoke the validity of a permit (license) to engage in corresponding activity and also may adopt a decision to suspend export and import operations of an individual, who has failed to register as a taxpayer in accordance with the established procedure, has failed to file a tax return according to the procedure established by tax law and during the established time limits or is any other way avoiding to pay taxes, interfering with the tax administrator's proper performance of duties and implementation of rights conferred by law.
Having received the tax administrator's instruction in accordance with the procedure established in part one hereof, an institution must carry it out without delay, immediately upon receipt of the instruction. Chapter X TAX DISPUTES AND LITIGATION Article
Tax Disputes
The taxpayer may dispute every action of the tax administrator or his officer regarding him and the consequences of this action.
The local tax administrator, the central administrator and the court shall investigate tax disputes.
The taxpayer shall have the right of hearing at every stage during a tax dispute investigation.
During every stage of a tax dispute investigation the tax administrator must endeavour to reach a mutual understanding with the taxpayer concerning identical application of the tax law.
Tax disputes between the tax administrator and the tax withholding person shall be investigated in accordance with the same procedure as tax disputes between the tax administrator and the taxpayer. Article
Filing of Complaints with the Tax Administrator
The local tax administrator shall examine the tax disputes which arise directly between the taxpayer and the tax administrator's officer conducting the inspection in keeping with tax laws and other laws as well as subordinate legislation based on such.
A taxpayer's complaint shall be accepted solely in instances when: 1) it is filed in writing within 20 days from receipt of a written decision from the tax administrator's officer; 2) it is filed with the tax administrator, whose officer's actions are the basis for the complaint; 3) the taxpayer's name, surname, (title), address, date of filing and signature is stated in the complaint; 4) actions subject to complaint are indicated.
Filing of complaint shall stop implementation of tax administrator's instruction but shall not bar issuance of impounding order of taxpayer's property or serve as basis for cancellation of property impounding.
The tax administrator who is investigating the complaint must adopt a decision within 30 days of receipt of complaint.
The tax administrator who is investigating the complaint shall according to his competence: 1) confirm the decision of the tax administrator's officer; 2) annul the decision of the tax administrator's officer; 3) partly confirm or annul the decision of the tax administrator's officer; 4) assign to perform a repeated investigation. Article
Investigation and Filing of Complaint before Central Tax Administrator
The central tax administrator shall investigate those tax complaints, which were investigated by the local tax administrator, or if the local tax administrator fails to adopt any decisions within the time limit specified in part four of Article
If the complaint is lodged as a result of decisions adopted by the central tax administrator, the first part of this Article shall not be applied.
The complaint filed before the central tax administrator shall be investigated only if : 1) submitted within 20 days following receipt of local tax administrator's decision regarding complaint investigation results or because the time period during which such a decision should have been adopted, has expired; 2) submitted for decision by tax administrator ( his officers) within 20 days following the day of receipt of decision subject to complaint; 3) filed before the central tax administrator; 4) the name, surname (title), address, filing date and signature of taxpayer are stated in the complaint; 5) actions subject to complaint are specified.
Filing of a complaint before the central tax administrator shall suspend the implementation of local tax administrator's decision, however, it shall not bar the decision to impound the taxpayer's property or be perceived as basis to annul impounding of property.
The central tax administrator must adopt a decision regarding the complaint within 30 days from the day of filing of the complaint. This time limit may be extended to 60 days per central tax administrator's decision, if additional investigation is required for the examination of the complaint. The individual who filed the complaint must be informed of this in writing.
The central tax administrator shall in accordance with his competence: 1) approve the decision of officers of local tax administrator or central tax administrator which is subject to the taxpayer's complaint; 2) annul the decision of officers of local tax administrator or of central tax administrator which is subject to the taxpayer's complaint; 3) partly approve or annul the decision of officers of local tax administrator or central tax administrator which is subject to the taxpayer's complaint; 4) issue instruction for local tax administrator to discuss anew the decision subject to complaint and to adopt a new decision.
In investigating the local tax administrator's decision, or one directly approved by his own officer, the central tax administrator shall have the right to examine all questions in connection with taxation of the taxpayer and shall have the right to alter an already adopted decision. Article
Formulation of Decision Regarding Complaint
The tax administrator, having examined the complaint, shall without delay inform the taxpayer in writing concerning the adopted decision and indicating the reasons for the adoption of the decision.
The right of the taxpayer to file a complaint regarding the adopted decision shall be explained in the decision.
The decision adopted by the central tax administrator must be implemented by the parties involved in the dispute, and also by the individuals connected with the dispute, following expiration of the time limit for complaint established in part three of Article
Only the exaction, in accordance with the decision adopted by the central tax administrator, of disputed penalties and interest shall be suspended during the interval while the taxpayer is filing a complaint in court regarding the decision adopted by the central tax administrator. Article
Filing in Court of Complaint against Tax Administrator's Decision
Having filed a complaint in court against the actions of an officer of the central tax administrator who had conducted the investigation and disagreeing with the decision of the central tax administrator (or if the central tax administrator failed to adopt such a decision within the period established by law), the taxpayer shall have the right to file a court complaint against the central tax administrator's decision (or if the central tax administrator has failed to adopt such a decision, against the actions of the officer of the central administrator).
Having filed with the central tax administrator a complaint against a decision adopted by the local tax administrator and disagreeing with the decision adopted by the central tax administrator, or if the central tax administrator failed to adopt a decision within the time limit established by law, the taxpayer shall file a complaint before court against the decision adopted by the local tax administrator.
The taxpayer must file a complaint no later than within 20 days from the receipt of the decision of the central tax administrator, and in the absence of decision approval, within 20 days from the other day on which the central tax administrator was to have approved the decision.
The tax administrator and the taxpayer shall have the right to acquaint the public through use of the mass media with court decisions regarding tax cases. Chapter XI RECOGNITION OF DATES AND DOCUMENTS Article
Setting of Time Limit
The date which the tax administrator marks as the date of receipt of documents, shall be recognised as the date on which the documents were submitted to the tax administrator.
The date which the taxpayer marks as the date of receipt of documents, shall be recognised as the date of presentation of documents to the taxpayer.
If the tax administrator or the taxpayer post the documents, the receipt of document date shall be determined by the official postmark, stamped by a post office, having that right.
Under circumstances where no evidence exists regarding receipt of document by post, the dates shall be determined based upon the date they were sent as confirmed by an official post office stamp.
The date establishment regulations enumerated in pars. one, two and three of this Article shall apply in investigating whether or not the terms established by tax laws have been violated.
If the last day for completing an action, according to law, is not a work day for the tax administrator, the action must be completed on the day following the non-work day. Article
Recognition of the Document Terms of the statutory limitations shall be established solely according to original documents which have all the mandatory requisites providing the document with legal power. I promulgate this Law passed by the Seimas of the Republic of Lithuania. Algirdas Brazauskas President of the Republic Vilnius June 28, 1995 No. I-974 (As amended by 13 June 1996)

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LAW LAW ON TAX ADMINISTRATION OF THE REPUBLIC OF LITHUANIA Chapter I GENERAL PROVISIONS Article 1. Purpose of the Law Th