OFFICIAL TRANSLATION REPUBLIC OF LITHUANIA LAW ON TAX administration 13 April 2004 No IX-2112 Vilnius (As amended on 16 June 2005 – No X-247) CHAPTER I GENERAL PROVISIONS Article

1. Purpose of the Law
2. This Law shall establish the basic concepts and regulations which must be observed in implementing the tax laws of the Republic of Lithuania, the basic principles of legal regulation of taxation, the list of taxes applied in the Republic of Lithuania, the functions, rights and obligations of the tax administrator, the rights and obligations of the taxpayer, the calculation and payment of taxes, the procedure of enforced recovery of taxes and related amounts as well as the procedure for the settlement of tax disputes.
3. This Law shall also ensure the implementation of the EU legal acts listed in the Annex hereto. Article
4. Definitions
5. “Summarised explanation of the tax law” shall mean the opinion presented, after coordination with the Ministry of Finance, by the central tax administrator or an institution authorised for the purpose under this Law on how the tax administrator or the aforementioned institution understands and applies the provisions of the tax law.
6. “Person” shall mean a natural person or a legal person. Any organisation of a foreign state recognised as having legal personality under the laws of the Republic of Lithuania or a foreign state shall be treated as a legal person.
7. “Budget” shall mean a state budget, municipal budgets and also monetary funds to which the taxes specified in Article 13 of this Law are paid (allocated) in accordance with a procedure prescribed by legal acts.
8. “Tax consultancy” shall mean any explanation provided by the tax administrator on a case-by-case basis to a specific taxpayer in relation to the taxes paid (due to be paid) by the latter.
9. “Credit institution” shall be interpreted as defined in the Law of the Republic of Lithuania on Financial Institutions; it shall also mean the Bank of Lithuania.
10. “Tax return” shall mean a document submitted by the taxpayer to the tax administrator which contains information about the amount of self-calculated tax for the period established in the tax law, also other data related to the calculation and payment of tax.
11. “Tax law” shall mean a law of the Republic of Lithuania establishing the taxes listed in Article 13 hereof, the present Law, the Customs Law, also an international treaty of the Republic of Lithuania or the Community customs legislation establishing taxes and/or defining issues related to the application of taxes or tax reliefs.
12. “Tax relief” shall mean special taxation conditions established in respect of the taxpayer or a group of taxpayers that are more favourable than the usual conditions of taxation.
13. “Tax arrears” shall mean an amount of the tax not paid in due time by the taxpayer in accordance with the procedure laid down in the tax law or a subordinate legal act adopted on the basis thereof.
14. “Tax overpayment” shall mean an amount of tax paid by the taxpayer in excess of the tax amount prescribed.
15. “Tax difference” shall mean an amount to be refunded (credited) from the budget to the taxpayer, which may arise when completing a tax return in accordance with the procedure laid down in the tax law.
16. “Tax administrator” shall mean a state institution or agency responsible for the administration of taxes, which has the powers conferred upon it by law to act in the field of tax administration.
17. “Tax administration” shall mean performing the functions of the tax administrator, also discharging the obligations and exercising the rights of the tax administrator and the taxpayer as specified in the tax law and other laws.
18. “Tax administration procedure” shall mean the acts performed by the tax administrator for the purpose of fulfilling its functions, also the acts performed by the tax administrator and the taxpayer for the purpose of discharging their obligations and exercising their rights established in tax laws.
19. “Taxpayer” shall mean a person having an obligation under the tax law to pay taxes. Under this Law, the withholding agent shall be deemed to be a taxpayer, i.e. the provisions of the Law shall apply to the former in the same manner as to the latter, with the exception of explicitly prescribed special cases. With regard to customs duties, the taxpayer shall be deemed to be a person having an obligation to pay a customs debt (hereinafter referred to as the “debtor”).
20. “Withholding agent” shall mean a person charged under tax legislation to withhold taxes from the taxpayer and pay it to the budget.
21. “Arrears in payments” shall mean tax arrears and other tax related amounts not paid in due time by the taxpayer in accordance with the procedure laid down in the tax law or a subordinate legal act adopted on the basis thereof.
22. “Tax obligation” shall mean a taxpayer’s duty under the tax law to calculate the tax correctly, pay the tax and related amounts to the budget in due time and perform all other duties related to the calculation and payment of taxes.
23. “Tax instalment agreement” shall mean an agreement concluded on the basis of a decision made by the tax administrator to defer (spread) the discharge of arrears in payments, providing for the payment schedule and other deferral conditions.
24. “Tax disputes” shall mean disputes arising between the taxpayer and the tax administrator over a decision on the approval of an inspection report or any other similar decision on the basis of which the tax is calculated anew and the taxpayer is instructed to pay it, also over a decision made by a tax administrator to refuse the refund (crediting) of a tax overpayment (tax difference).
25. “Tax inspection” shall mean an inspection conducted by the tax administrator in respect of the taxpayer to control the taxpayer’s compliance with the requirements prescribed by tax laws in the fields of calculation, declaration and payment of taxes and, in the cases prescribed by law, in other fields as well.
26. “Tax investigation” shall mean monitoring the tax payer’s activities by the tax administrator, which includes an analysis of tax returns, customs declarations, documents and any other information available about the tax payer, also visiting taxpayers, controlling their activities with a view to identifying and eliminating any deficiencies and contradictions in respect of the calculation, declaration and payment of taxes.
27. “Tax” shall mean a monetary liability in respect of the state imposed on the taxpayer by the tax law. For the purpose of this Law, the concept of tax shall also include the payments and levies specified in Article
29. “Customs duties” shall mean import duties and/or export duties as defined in Article 4 of the Community Customs Code.
30. “Tax related amounts” shall mean late payment interest, penalties, interest paid under a tax instalment agreement and late payment penalties on such interest.
31. The terms used in paragraphs 1-25 of this Law shall be interpreted as defined above, unless the relevant tax law provides otherwise.
32. Other terms used in tax laws shall be defined in separate articles of this Law and the relevant tax laws.
33. Under this Law, the Community customs legislation shall be: 1) Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code (hereinafter referred to as the “Community Customs Code”); 2) Commission Regulation (EEC) No. 2454/93 of 2 July 1993 laying down provisions for the implementation of Council Regulation (EEC) No 2913/92 establishing the Community Customs Code (hereinafter referred to as the “provisions implementing the Community Customs Code”); 3) Council Regulation (EEC) No 918/83 of 28 March 1983 setting up a community system of reliefs from customs duty; 4) Council Regulation (EEC) No 2658/87 of 23 July 1987 on the tariff and statistical nomenclature and on the common customs tariff; 5) other EC Council and Commission legal acts and international treaties concluded or acceded to by the European Community regulating the procedure of importing goods into the Community customs territory from third countries and exporting from the said territory to third countries as well as the procedure for the application of import and export duties on such imported and exported goods. CHAPTER II LEGAL REGULATION OF TAXES. IMPLEMENTATION OF TAX LAWS Article
34. Legal Regulation of Taxes
35. The system of tax legislation shall comprise tax laws and subordinate legal acts adopted on their basis.
36. Any tax falling within the national competence of the Republic of Lithuania can be established only by law.
37. The Seimas of the Republic of Lithuania shall ensure that the tax laws of the Republic of Lithuania establishing a new tax, a new tax rate, a tax relief and/or sanctions for violations of tax laws or substantially amending the procedure of specific taxation or the principles of the legal regulation of taxation and their application should come into effect not earlier than within six months after the day of their publication.
38. Paragraph 3 of this Article shall not apply to the amendments of tax laws of the Republic of Lithuania related to the Law on the Approval of Financial Indicators of the State Budget and Municipal Budgets and to legal acts approximated with the provisions of EU legislation.
39. All contradictions and ambiguities of the tax legislation of the Republic of Lithuania shall be interpreted in favour of the taxpayer. Article
40. Tax Reliefs
41. Tax relief (reliefs) shall be established only by the relevant tax law regulating the procedure of tax calculation. This Law may establish reliefs in respect of taxes, penalties or late payment interest, which are not related to the procedure of tax calculation or the tax rate. Temporary tax reliefs falling within the national competence of the Republic of Lithuania may also be established by special laws on tax reliefs adopted by the Seimas of the Republic of Lithuania.
42. A special law on tax reliefs shall be a law allowing exceptions to the taxation procedure, which are not provided for in the tax laws listed in Article 13, adopted exclusively for the purpose of granting these reliefs. Article
43. Primacy of International Treaties
44. Where the rules of taxation laid down in the international treaties of the Republic of Lithuania are other than stipulated in the relevant tax laws and where such treaties are ratified, brought into effect and applied in the Republic of Lithuania, the rules set forth in the aforementioned international treaties shall have primacy over respective national legislation.
45. With regard to customs duties, the provisions of paragraph 1 of this Article shall apply in so far as they do not contravene the Community customs legislation. Article
46. Principles of Legal Regulation and Application of Taxation The following shall be the basic principles for the legal regulation and application of taxation: equality of taxpayers, fairness and universal obligation, clarity of taxation, and precedence of content over form. Article
47. Equality of Taxpayers Where tax laws are applied, all taxpayers shall enjoy the equality of treatment stemming from the conditions established by these laws. Article
48. Fairness and Universal Obligation
49. Each taxpayer must pay the taxes established by tax laws, acting in accordance with the procedure of calculation and payment of taxes laid down in tax legislation.
50. Tax reliefs falling within the national competence of the Republic of Lithuania may not be of an individual character or in violation of a proportional distribution of the tax burden.
51. For the purpose of tax administration, the tax administrator shall observe the criteria of prudence and fairness. Article
52. Clarity of Taxation The content of a tax obligation, the procedure of and the grounds for its commencement, discharge and cessation shall be clearly defined in the tax legislation of the Republic of Lithuania. Article
53. Precedence of Content over Form In respect of taxes, the content of the activities carried on by the participants of legal relations shall take precedence over their form. Article
54. Implementation of Tax Laws Subordinate legal acts implementing the tax laws shall be adopted by the Government of the Republic of Lithuania or by the Ministry of Finance under mandate from the Government. Where dealing with issues falling within their spheres of competence, the Government of the Republic of Lithuania and the Ministry of Finance may assign the central tax administrator to adopt subordinate legal acts laying down the relevant rules on the implementation of tax laws. Other institutions may be assigned to implement the tax law only in cases authoritative under tax laws. Article
55. Explanation of Tax Laws
56. Summarised explanations of tax laws shall be presented and published by the State Tax Inspectorate under the Ministry of Finance of the Republic of Lithuania, after coordination with the Ministry of Finance. Summarised explanations of the laws regarding taxes administered by the Ministry of Environment or an institution authorised by it, the Customs of the Republic of Lithuania, the Ministry of Agriculture or an institution authorised by it shall be presented and published by the Ministry of Environment, the Customs Department under the Ministry of Finance (hereinafter referred to as the “Customs Department”) and the Ministry of Agriculture respectively, after coordination with the Ministry of Finance.
57. A summarised explanation of the tax law shall not be legally binding on the taxpayer and shall express an opinion of a competent state authority as regards issues regulated by tax laws.
58. For the purpose of educating and consulting the taxpayer on issues relating to the payment of taxes, the tax administrator shall take into account the summarised explanation of the relevant tax law. CHAPTER III TAXES Article
59. Taxes The following taxes shall be administered under this Law: 1) value added tax; 2) excise duty; 3) personal income tax; Paragraph 4 (version before 1 January 2006): 4) tax on immovable property of enterprises and organisations; Paragraph 4 (version after 1 January 2006): 4) immovable property tax; 5) land tax; 6) state natural resources tax; 7) petroleum and gas resources tax; 8) tax on environmental pollution; 9) consular fees; 10) stamp duty; 11) deductions from income under the Law on the Financing of Road Maintenance and Development Programme; Paragraph 11 is repealed on 1 July
60. 12) inheritance tax; 13) compulsory health insurance contributions; 14) contributions to the Guarantee Fund; 15) state-imposed fees and charges; 16) lottery and gaming tax; 17) fees for the registration of industrial property objects; 18) corporate income tax; 19) state social insurance contributions; 20) excess quota tax on white sugar; 21) quota sugar production tax; 22) additional sugar production tax; 23) customs duties; 24) deductions from income under the Law of the Republic of Lithuania on Forestry; 25) tax on the use of state property by the right of trust; Article 13 shall be supplemented by subparagraph 26 as of 1 January 2006: 26) social tax. Article
61. Application of Tax Administration Procedures Provided for in this Law
62. The tax administration procedures provided for in this Law shall be applied in respect of all taxes specified in Article 13 of this Law and the taxpayers thereof, unless this Law or the relevant tax law provide otherwise.
63. The stamp duty referred to in subparagraph 10 of Article 13 of this Law shall be administered under this Law only to the extent determined by the Code of Civil Procedure of the Republic of Lithuania.
64. State-imposed fees and charges referred to in subparagraph 15 of Article 13 shall be administered under this Law only to the extent determined by the Law of the Republic of Lithuania on Fees and Charges.
65. Fees for the registration of industrial property objects referred to in subparagraph 17 of Article 13 shall be administered under this Law only to the extent determined by the Law of the Republic of Lithuania on Fees for the Registration of Industrial Property Objects.
66. State social insurance contributions referred to in subparagraph 19 of Article 13 shall be administered under this Law only to the extent determined by the Law of the Republic of Lithuania on State Social Insurance.
67. Customs duties referred to in subparagraph 23 of Article 13 shall be administered under this Law only to the extent that they do not contravene the Community customs legislation. CHAPTER IV PARTICIPANTS OF LEGAL RELATIONS IN TAX ADMINISTRATION SECTION ONE TAX ADMINISTRATORS. THEIR FUNCTIONS, RIGHTS AND OBLIGATIONS Article
68. Tax Administrator
69. The state institution responsible for the administration of taxes specified in Article 13 of this Law in the Republic of Lithuania, with the exception of customs duties, shall be the State Tax Inspectorate.
70. The Customs of the Republic of Lithuania (hereinafter referred to as the “Customs”) shall be responsible for the administration of customs duties in the Republic of Lithuania. The Customs shall administer the taxes referred to in subparagraphs 1 and 2 of Article 13 to the extent assigned by the Law on Value Added Tax and the Law on Excise Duty. Unless this Law provides otherwise, the Customs administering customs duties and the taxes specified in this paragraph shall be considered to be the tax administrator, the Customs Department shall be considered to be the central tax administrator, and the territorial customs office shall be considered to be a local tax administrator.
71. No other state institutions or agencies may perform the functions of the tax administrator, except for the cases explicitly stated in this Law or the relevant tax law. Article
72. State Institutions and Agencies Authorised to Perform Certain Actions relating to Tax Administration
73. The taxes referred to in paragraphs 6, 7, 8 and 24 of Article 13 of this Law shall be administered by the Ministry of Environment or an institution authorised by it, but only to the extent assigned by the Law on State Natural Resources Tax, the Law on Environmental Pollution Tax, the Law on Petroleum and Gas Resources Tax, and the Law on Forestry. Only the Ministry of Environment or an institution authorised by it shall verify whether the taxes referred to in paragraphs 6 and 8 of Article 13 of this Law have been correctly calculated, declared and paid, and shall also provide the relevant tax consultancy.
74. The taxes referred to in paragraphs 20, 21 and 22 of Article 13 of this Law shall be administered by the Ministry of Agriculture or an institution authorised by it, but only to the extent assigned by the Law on Quota Sugar Production Tax and Additional Sugar Production Tax as well as the Law on Excess Quota Tax on White Sugar. Only the Ministry of Agriculture or an institution authorised by it shall verify whether the taxes referred to in paragraphs 6 and 8 of Article 13 of this Law have been correctly calculated, declared and paid, and shall also provide the relevant tax consultancy.
75. The provisions of this Law shall not apply with regard to the procedure of verifying the correctness of tax calculation, declaration and payment as performed by the institutions and agencies referred to in paragraphs 1 and 2 of this Article, the documentation and approval of verification results, and any appeals against actions by such institutions and agencies as well as by their officers. The aforementioned legal relations shall be governed by the legal acts regulating the activities of these institutions and the relevant laws on administered taxes. Article
76. State Tax Inspectorate
77. The State Tax Inspectorate shall be an institution established under the Ministry of Finance of the Republic of Lithuania.
78. The State Tax Inspectorate under the Ministry of Finance of the Republic of Lithuania (hereinafter referred to in this Law and other legal acts as the “State Tax Inspectorate under the Ministry of Finance”) and local tax inspectorates shall be budget-financed institutions having their own bank accounts, seals and common symbols.
79. The State Tax Inspectorate shall act in compliance with the Constitution of the Republic of Lithuania, this Law, other laws, subordinate legal acts and its own regulations. The regulations of the State Tax Inspectorate under the Ministry of Finance shall be approved by the Minister of Finance, while the regulations of local tax inspectorates shall be approved by the Head of the State Tax Inspectorate under the Ministry of Finance. Article
80. Structure of the State Tax Inspectorate The State Tax Inspectorate shall be comprised of: 1) the State Tax Inspectorate under the Ministry of Finance - the central tax administrator; 2) local tax inspectorates - local tax administrators. Article
81. Tasks of the State Tax Inspectorate
82. The main tasks of the State Tax Inspectorate shall be: 1) to assist the taxpayers in exercising their rights and performing their obligations; 2) to implement tax laws; 3) to ensure the payment of taxes to the budget.
83. The tasks of the State Tax Inspectorate shall be implemented when the central and local tax administrators perform the functions assigned to them by law. Article
84. Work Organisation of the State Tax Inspectorate under the Ministry of Finance
85. The State Tax Inspectorate under the Ministry of Finance shall be directed by the head of the State Tax Inspectorate. He shall be appointed and dismissed from office by the Minister of Finance in accordance with the procedure laid down in the Law on Civil Service.
86. The structure of the State Tax Inspectorate under the Ministry of Finance shall be approved by its head, after coordination with the Minister of Finance.
87. The State Tax Inspectorate under the Ministry of Finance shall be subordinate and accountable to the Ministry of Finance. Article
88. Work Organisation of Local Tax Inspectorates
89. The number and areas of activity of local tax inspectorates shall be established by the Minister of Finance, acting on a recommendation from the Head of the State Tax Inspectorate under the Ministry of Finance.
90. The structure of local tax inspectorates shall be approved by the Head of the State Tax Inspectorate under the Ministry of Finance.
91. The head of a local tax inspectorate shall be appointed and dismissed from office by the Head of the State Tax Inspectorate under the Ministry of Finance in accordance with the procedure laid down in the Law on Civil Service.
92. The local tax inspectorate shall be subordinate and accountable to the State Tax Inspectorate under the Ministry of Finance. Article
93. Civil Servants of the State Tax Inspectorate
94. Civil servants of the State Tax Inspectorate shall be appointed and dismissed from office by the head of the employing tax inspectorate in accordance with the procedure laid down in the Law on Civil Service.
95. Working and remuneration conditions as well as social guarantees of the civil servants of the State Tax Inspectorate shall be laid down in the Law on Civil Service, other laws and subordinate legal acts. Article
96. The Customs The legal status of the Customs and its officers shall be regulated by the Law on Customs and the Statute of Service in the Customs of the Republic of Lithuania. Article
97. Organisation of Training for Tax Officers
98. The State Tax Inspectorate under the Ministry of Finance shall have an obligation to organise the training (in-service training) of its officers according to the training programmes developed for that purpose.
99. The State Tax Inspectorate under the Ministry of Finance must ensure a continuous in-service training for all of its officers.
100. Newly recruited tax officers must attend a course of initial training on the general issues of taxes and their administration.
101. The training of customs officers shall be organised in accordance with the Law on Civil Service, the Statute of Service in the Customs of the Republic of Lithuania, and other legal acts regulating customs activities. Article
102. Functions of the Central Tax Administrator
103. Within its sphere of competence, the central tax administrator shall perform the following main functions: 1) organise education and consultancy for taxpayers; 2) provide summarised explanations of tax laws, after coordination with the Ministry of Finance; 3) set forth the priorities and procedures for servicing taxpayers; 4) establish the accounting procedures to be followed by the local tax administrator in respect of tax obligations and discharged taxes and control compliance therewith; 5) establish the procedures for refunding (crediting) tax overpayments (tax differences) as well as taxes, penalties and late payment interest recovered without due grounds (in an unjustified manner); 6) set forth the priorities and procedures for exercising control over the correct calculation, declaration of payment of taxes; 7) exercise control over the correct calculation, declaration and payment of taxes; 8) set forth the priorities and procedures for recovering arrears in payments; 9) consider tax disputes; 10) settle issues relating to the application of mutual agreement procedures under double taxation treaties concluded and brought into effect by the Republic of Lithuania or under the Convention on the elimination of double taxation in connection with the adjustment of profits of associated enterprises (90/436/EEC). This function shall be performed only by the State Tax Inspectorate under the Ministry of Finance acting in the capacity of the central tax administrator; 11) represent the interests of the State in courts and other institutions; 12) collect and summarise the best practices of tax administration procedures and introduce them to local tax administrators; 13) adopt and draft subordinate legal acts on taxation under mandate from the Seimas of the Republic of Lithuania, the Government and the Ministry of Finance; 14) adopt subordinate legal acts falling within the competence of the central tax administrator; 15) submit proposals to the Ministry of Finance concerning the implementation of tax laws and other legal acts and the improvement of tax administration; 16) cooperate with Lithuanian and foreign state, public, international and other institutions and agencies; 17) cooperate, in the capacity of a competent authority, with the tax administrations (competent authorities) of foreign states; 18) coordinate, control and give methodological instructions to the local tax administrator and periodically assess its performance; 19) manage the register of taxpayers. This function shall be performed only by the State Tax Inspectorate under the Ministry of Finance acting in the capacity of the central tax administrator.
104. The other functions of the central tax administrator shall be set out in its own regulations, this and other laws and subordinate legal acts. Article
105. Functions of the Local Tax Administrator
106. Within its sphere of competence, the local tax administrator shall perform the following main functions: 1) provide consultancy to the taxpayer on the payment of taxes and supply information about laws and legal acts concerning tax matters; 2) receive tax returns and other accounting documents from the taxpayer and issue relevant documents certifying the submission of tax returns and other actions by the taxpayer; 3) keep accounts of the taxes paid to the budget; 4) register taxpayers and manage the register of taxpayers. This function shall be performed only by the local tax inspectorate acting in the capacity of a local tax administrator; 5) allocate tax amounts among budgets in accordance with the procedure prescribed by law; 6) implement the decisions of municipal institutions concerning the application of reliefs in respect of the taxes paid to the municipal budget. This function shall be performed only by the local tax inspectorate acting in the capacity of a local tax administrator; 7) exercise control over the correct calculation, declaration and payment of taxes; 8) provide an expert’s opinion on the calculation, declaration and payment of taxes subject to the provisions of the Code of Criminal Procedure of the Republic of Lithuania; 9) enforce the recovery of arrears in payments; 10) refund (credit) tax overpayments (tax differences) as well as illegally recovered taxes, late payment interest and penalties to taxpayers; 11) cooperate and exchange information with other Lithuanian tax administrators, state and municipal institutions and agencies in accordance with the established procedure.
107. Other functions of the local tax administrator shall be set out in its own regulations, this and other laws and subordinate legal acts. Article
108. Cooperation between the Tax Administrator and the Taxpayer
109. For the purpose of assisting the taxpayer to exercise his rights and discharge his obligations, the tax administrator, within its sphere of competence, shall: 1) educate the taxpayers and provide tax consultancy across the Republic of Lithuania; 2) prepare user-friendly tax returns, supply taxpayers free of charge with such forms, approve and explain the procedure of completing tax returns; 3) provide information, in accordance with the administrative procedure, about the possibility of appealing against actions by tax officers maintaining direct contacts with the taxpayer; 4) organise meetings with taxpayers and representatives of their associations or other organisations representing their interests; 5) cooperate in any other way with taxpayers and seek mutual understanding.
110. Where cooperating with the tax administrator, the taxpayer shall voluntarily discharge his obligations under tax legislation and shall not preclude the tax administrator from exercising its rights granted by law. Article
111. Cooperation with Tax Administrators of Foreign States
112. The central tax administrator shall cooperate with the tax administrations (competent authorities) of foreign states on the basis of international treaties or agreements.
113. Unless an international treaty or agreement provides otherwise, assistance to the tax administration (competent authority) of a foreign state shall be provided only under conditions of reciprocity and provided that: 1) a request is made concerning the required assistance; 2) assurance is provided that the information supplied will be used solely for the purpose of taxation or investigation of violations of tax legislation; 3) the fulfilment of the request will not violate the legitimate interests of the Republic of Lithuania or its subjects or entities and no state, official, professional, commercial or other type of secret information protected by law will be disclosed; 4) the secrecy of information is ensured; 5) the requesting foreign state institution has exhausted all conventional means to achieve the objective in respect of which the request has been made.
114. If the central tax administrator refuses to provide information or assistance, it shall notify the requesting institution of the reasons for refusing to do so.
115. When providing assistance to the tax administrations (competent authorities) of foreign states, the tax administrator shall have the same rights in respect of taxpayers or third persons as when performing the other functions assigned to it.
116. The central tax administrator shall, within its sphere of competence and taking into account the provisions of the relevant international treaties and agreements, establish a detailed procedure for implementing this Article. Article
117. Cooperation with Tax Administrations (Competent Authorities) of EU Member States
118. The central tax administrator shall, within its sphere of competence, cooperate with the tax administrations (competent authorities) of EU Member States when exchanging information about taxpayers, conducting joint inspections and recovering arrears in payments at the request of the tax administrations (competent authorities) of EU Member States or addressing the said authorities concerning the recovery of arrears in payments. Cooperation shall be carried out on the grounds provided for in paragraph 1 of Article 28 of this Law.
119. The central tax administrator may exchange any information with the tax administrations (competent authorities) of EU Member States where such information may enable them to effect a correct calculation of taxes and investigate violations of tax laws. Information may be exchanged: 1) on request in a particular case; 2) regularly (automatic exchange of information) without prior request; 3) in cases provided for in agreements on administrative cooperation where the designated institutions are allowed to communicate directly with each other; 4) in cases provided for in agreements on administrative cooperation where an officer of a competent authority of another Member State is allowed to participate in the process of collecting information; 5) by forwarding information, of which its has knowledge, without prior request in at least one the following circumstances: tax is not paid in another Member State or it is paid incorrectly; the taxpayer is subject to tax reliefs or is exempt from tax which would give rise to an increase in tax or to liability to tax in another Member State; transactions are carried out between taxpayers in one or several Member States in such a way that tax is not paid in either or both of the Member States; tax may not be paid as a result of artificial distribution of income among associated (related) economic entities; information forwarded to the central tax administrator by the tax administration (competent authority) of another EU Member State has enabled data to be obtained which may be relevant for taxation in the forwarding Member State.
120. Requests by the tax administrations (competent authorities) of EU member states for assistance in recovering arrears in payments shall be examined and met in compliance with the procedure laid down in the Law of the Republic of Lithuania on Providing Assistance to the Institutions of EU States for the Recovery of Claims relating to Levies, Customs Duties, Taxes and other Monetary Amounts and Using the Assistance Provided by the Institutions of the European Union Member States for the Recovery of the Said Amounts. The amounts indicated in the requests, where the tax administrator bears responsibility for their recovery in accordance with the provisions of the aforementioned law, shall be recovered as arrears in payments in accordance with the procedure laid down this Law.
121. Unless EU legal acts or the relevant international treaties provide otherwise, the principles specified in paragraph 2 of Article 28 of this Law shall apply for the purpose of cooperation with the tax administrations (competent authorities) of EU Member States.
122. The provisions of paragraphs 3, 4 and 5 of Article 28 of this Law shall also apply for the purpose of cooperation with the tax administrations (competent authorities) of EU Member States. Article
123. Cooperation with Other Institutions and Agencies of the Republic of Lithuania and Foreign States
124. Where performing its functions, the tax administrator shall cooperate with other state and municipal institutions and agencies of the Republic of Lithuania and institutions of foreign states and shall also conduct joint inspections and perform other control functions as well as ensure the exchange of information.
125. The state and municipal institutions and agencies of the Republic of Lithuania must provide comprehensive assistance to the tax administrator and submit information about any acts comprising elements of a tax law violation as soon as they become aware of the fact in the course of performing their functions. Article
126. Cooperation with Other Persons In order to perform its functions more effectively, the tax administrator may conclude agreements on the transfer of certain functions, receipt of services or other issues as well as memoranda of mutual agreement with persons other than specified in Articles 27-30 of this Law. Article
127. Obligations of the Tax Administrator When performing the functions assigned to it, the tax administrator (officer) must: 1) promote the voluntary payment of taxes; 2) respect the taxpayer’s rights; 3) strictly comply with tax legislation; 4) within its sphere of competence, protect the legitimate interests of the State; 5) ensure the secrecy of information about the taxpayer; 6) exercise its rights only to the extent related to the functions assigned to it; 7) when performing its functions, make an effort not to impede the taxpayer’s activities; 8) perform other functions set out in this and other laws and in subordinate legal acts. Article
128. Rights of the Tax Administrator When performing the functions assigned to it, the tax administrator (officer) shall have the right: 1) to obtain from persons, including credit institutions, the data required for the performance of its obligations, copies of documents, computer file data (copies thereof) concerning the assets, income, expenses and activities of this or another person and to use information from the registers and databases administered and managed by itself or other legal persons; 2) to have access to the taxpayer’s territory, buildings and premises in accordance with the procedure laid down in this Law; 3) to temporarily take away the taxpayer’s accounting documents necessary to verify the correctness of calculations made in respect of taxes and transactions; 4) to stamp and/or seal areas, premises and installations used for the safekeeping of documents, securities, money and material valuables; to close the territory or parts thereof; 5) to take samples or specimens of products (goods), to make control purchases; 6) to mark the taxpayer’s documents to prevent their counterfeiting; 7) to give mandatory instructions to taxpayers and other natural or legal persons (where related to exercising the rights of a tax administrator in respect of the taxpayer) to visit the tax administrator, provided that this is necessary for the latter to perform its functions; to issue instructions concerning the calculation, declaration and payment of taxes, the declaration of property and income, and the keeping of accounts; 8) to enforce the recovery of arrears in payments from persons; 9) within its sphere of its competence, to complete protocols of administrative offences and perform other actions provided for in the Code of Administrative Offences, to impose other administrative sanctions and penalties prescribed by law; 10) to carry out personally or require other competent authorities to carry out control measurements, to check computer programmes and their data, to take the inventory of material valuables, and conduct other inspections; 11) to install meters and other measuring devices in the taxpayer’s storage facilities, warehouses and other facilities used for operations; 12) in the event of a suspicion of violation of legal acts the responsibility for the implementation of which is borne by the tax administrator, to stop and inspect the means of transport as well as to detain and check the goods and documents in accordance with the procedure of operational inspection approved by the central tax administrator; 13) in the event of a reasonable suspicion that the income of a person has not been subject to taxation in accordance with the procedure prescribed by law or that property has been acquired with the funds that were not taxed in accordance with the procedure prescribed by the laws, to instruct persons to submit substantiated explanations in the form and subject to the procedure established by the central tax administrator concerning the sources of acquisition of property and receipt of income; 14) to apply to the taxpayer, other natural and legal persons (where related to exercising the rights of the tax administrator in respect of the taxpayer) and to instruct them to eliminate the circumstances and conditions precluding the tax administrator from performing its functions properly; 15) to take enforcement measures in respect of tax obligations; 16) to submit by proxy or transfer claims relating to the recovery of arrears in payments to the company Turto Bankas in accordance with the procedure established by the Minister of Finance; 17) within its sphere of competence, to bring legal action to court for the recognition of a transaction or part thereof as invalid; to be an applicant or a respondent in other cases in court; 18) to conduct a tax investigation; 19) to exercise other rights granted by tax and other laws. Article
129. Documentation of Tax Administrator’s Actions When performing its functions and exercising the rights granted upon it by this Law, the tax administrator (officer) shall document its actions as decisions and other documents in the form and subject to the procedure of completing them as established by the central tax administrator. Article
130. Liability of the Tax Administrator
131. Where the tax administrator has caused damage to the taxpayer by illegal actions or failure to act, it must compensate for the damage so caused in accordance with the procedure prescribed by law. A tax officer whose direct actions or failure to act have caused damage shall be held liable in accordance with the procedure laid down in the Law on Civil Service and other legal acts.
132. Where a tax officer has performed illegal actions, he shall be held liable in accordance with the procedure prescribed by law. SECTION TWO TAXPAYER. RIGHTS AND OBLIGATIONS Article
133. Rights of the Taxpayer A taxpayer shall have the right: 1) to receive from the tax administrator, free of charge, information about taxes, tax reliefs, effective tax legislation and other information necessary to discharge tax obligations; 2) to receive consultancy on tax payment issues; 3) to request that tax overpayments be refunded (credited) in due time; 4) to directly participate or be represented (unless the laws explicitly prohibit such representation) by a legal or authorised representative in legal relations with the tax administrator , and also with respect to tax dispute settlement institutions; 5) to take part in the tax inspection process; 6) to provide explanations and replies concerning the inspection report; 7) to have access to decisions on the approval of an inspection report and other decisions by the tax administrator on the amount of tax obligations; 8) to refuse to comply with any illegal instructions of the tax administrator, including the right to refuse to provide information if the instruction given relates to the data which is not at the disposal of the taxpayer and which the taxpayer does not have to collect under effective legal acts; 9) to demand that the tax administrator, when performing administrative actions in respect of the taxpayer, should strictly comply with the procedures prescribed by tax legislation and should not exceed the powers conferred upon it; 10) to request that the secrecy of information about the taxpayer be ensured; 11) to request compensation for damage to property or non-pecuniary damage caused by illegal acts of the tax administrator; 12) to appeal, in accordance with the procedure prescribed by law, against any action or failure to act by the tax administrator (officer); 13) to exercise other rights granted by this and other laws and subordinate legal acts. Article
134. Consultancy for Taxpayers
135. Consultancy to taxpayers on specific tax issues shall be provided in writing by the local tax administrator.
136. The taxpayer shall not be obliged to comply with the tax advice provided. Article
137. Secrecy of Information about the Taxpayer
138. Information concerning the taxpayer, which is supplied to the tax administrator, shall be kept secret and used solely for legitimate purposes.
139. The following information shall not be kept secret: 1) the taxpayer identification number, also other identification numbers assigned to the taxpayer by the registers and databases of taxpayers; 2) the date of registering in and deleting from the register of taxpayers as well as other registers and databases referred to in subparagraph 1 of this paragraph; 3) the amount of taxes paid by the taxpayer that is a legal person. The amount of taxes paid by the taxpayer that is a natural person shall not be kept secret in the cases established by law; 4) the amount of arrears in payments by the taxpayer; 5) data from the annual accounts to be published in accordance with the procedure prescribed by the laws of the Republic of Lithuania; 6) information concerning the violations of tax legislation where the taxpayer’s guilt has been proven. The taxpayer’s guilt shall be considered as proven where the taxpayer has not appealed against the tax administrator’s actions within the time limits and in accordance with the procedure set out in the laws or where the taxpayer has appealed against the tax administrator’s actions but the institution examining the appeal does not acknowledge such actions to be illegal by its decision and the taxpayer does not appeal against the decision within the time limits and in accordance with the procedure set out in the laws or where such a decision is final; 7) other information that is not considered as secret under the laws of the Republic of Lithuania.
140. The tax administrator may disclose the information specified in paragraph 2 of this Article without the taxpayer’s consent or knowledge. The cases, manner, scope and procedure of disclosing information concerning the taxpayer, which is available to the tax administrator and which is not considered as secret, to third persons shall be established by the central tax administrator within its sphere of competence, unless the laws provide otherwise. Article
141. Disclosure of Information about the Taxpayer
142. Information about the taxpayer may be provided to: 1) another Lithuanian tax administrator where it is necessary for the performance of its functions; 2) foreign tax administrations (competent authorities); 3) European Union competent authorities; 4) courts of law, law enforcement authorities, other state institutions and agencies, entities of operational activities and other persons in the cases provided for in the laws where it is necessary for the performance of their functions; 5) an institution authorised by the Government of the Republic of Lithuania to conduct an analysis of enterprise activities in accordance with the procedure established by the Government; 6) the Ministry of Finance for the performance of its functions; 7) state agencies administering official statistics for the performance of their functions; 8) the company Turto Bankas to the extent necessary for the recovery of arrears in payments transferred thereto; 9) other persons where the taxpayer requests so in writing or gives its consent (raises no objection) to the dissemination of such information.
143. A person who receives information under subparagraphs 1, 4-8 of paragraph 1 of this Article and also where such information becomes known to a person in the course of implementing the provisions of the agreement referred to in Article 31 of this Law must keep it secret.
144. The institutions specified in subparagraph 2 of paragraph 1 of this Article shall use the supplied information for the purposes of taxation and investigation of law violations in the field of taxes. The taxpayer may allow the aforementioned institutions to forward the supplied information to courts of law and law enforcement authorities, and also tax administrations (competent authorities) of third countries where necessary for the purpose of taxation or investigation of law violations in the field of taxes.
145. Information about the taxpayer shall be furnished in the manner provided for in legal acts and international treaties (agreements).
146. Legal persons that receive information pursuant to subparagraphs 1, 4-8 of paragraph 1 of this Article must ensure that the information received is made available only to those of their employees who are directly involved in the performance the functions for which such information is provided. The said legal persons must also ensure that each case of usage of the information received should be registered.
147. Where, in the cases specified in paragraph 1 of this Article, the tax administrator has supplied incorrect information about the taxpayer, it must correct the error as soon as it becomes aware of the fact.
148. A tax officer shall keep information about the taxpayer secret even after the end of their service, except for the cases specified in this Law.
149. The tax administrator and any other person who was supplied with or who became aware of secret information about the taxpayer shall be held liable for its disclosure in accordance with the procedure prescribed by the laws, except for the cases where the laws allow the disclosure thereof. Article
150. Obligations of the Taxpayer The taxpayer must: 1) discharge tax obligations accurately and in due time; 2) cooperate with the tax administrator, follow its lawful instructions and not preclude the exercising of the rights granted upon it by law; 3) register as a taxpayer in accordance with the procedure prescribed by the legal acts, notify in due time and manner about any changes in the data contained in the register of taxpayers; 4) correctly calculate the tax in compliance with tax laws; 5) file tax returns and other documents specified in the legal acts in due time; 6) keep accounts, safekeep the accounting documents and registers as well as other documents in accordance with the procedure prescribed by the legal acts; 7) create the required conditions for the tax administrator to conduct on site inspections; 8) supply the tax administrator with all the documents, computerised accounting data and other information required for inspection purposes; 9) provide, in accordance with the procedure laid down in Article 42 of this Law, the tax administrator with information about opening an account with a foreign credit institution; 10) perform other functions set out in this and other laws and subordinate legal acts. Article
151. Submission of Explanations about the Sources of Acquisition of Property and Receipt of Income The taxpayer must, not later than within ten days (unless the tax administrator specifies otherwise) from the date of receipt of instructions from the tax administrator referred to in paragraph 13 of Article 33 of this Law, submit substantiated explanations concerning the sources of acquisition of property and receipt of income. Article
152. Submission of Information about the Opening and Closure of Accounts in Foreign Credit Institutions Legal persons registered in the Republic of Lithuania must notify the State Tax Inspectorate under the Ministry of Finance about all types of accounts opened or closed in foreign credit institutions not later than within five working days after the opening or closure of the account. Natural persons must notify about any opened or closed accounts in foreign credit institutions in accordance with the procedure and within the time limits set forth by the Government of the Republic of Lithuania or an institution authorised by it. Article
153. Register of Taxpayers
154. For the purpose of keeping a record of taxpayers and exercising control over the correct calculation, payment and withholding of taxes, a general register of taxpayers shall be set up.
155. The tax administrator (respective register management body) shall register all persons whose registration is obligatory under Article 45 of this Law. Article
156. Management of the Register of Taxpayers The procedure of collecting, accumulating, processing, systemising, storing, using and providing data on taxpayers shall be laid down in the Regulations for the Register of Taxpayers approved by the Government of the Republic of Lithuania. Article
157. Registration of Taxpayers
158. Unless the Regulations for the Register of Taxpayers provide otherwise, the person who has an obligation to pay taxes under the tax law must register with the respective local tax administrator (register management body) and provide data concerning the registration of the taxpayers specified in the Regulations for the Register of Taxpayers.
159. Natural persons receiving income incidental to employment relations or relations in their essence corresponding to employment relations shall register as taxpayers through their employer which is a withholding agent.
160. Taxpayers paying taxes on specific property shall be registered by the respective tax administrator (register management body) on the basis of information provided by an institution engaged in the legal registration of such property.
161. The tax administrator (respective register management body) may, on the basis of the information at its disposal and at its own initiative, register a person as a taxpayer or update the data thereon if the person fails to properly perform the obligations specified in Article 46 of this Law. The person registered as a taxpayer or the taxpayer whose data are updated shall be informed respectively about the aforementioned actions where the person’s address is known. Article
162. Timeframe for the Registration of Taxpayers. Notification of Modified or New Data
163. Unless the Regulations for the Register of Taxpayers provide otherwise, the person who has an obligation to pay taxes under the tax law must register with the respective local tax administrator performing the functions of a register management body within five working days after legal registration and, where legal registration is not prescribed by law or where the person engages in activity earlier than five working days after legal registration, not later than the day of the start of activities.
164. A person who has registered as a taxpayer must notify the respective tax administrator performing the functions of a register management body about any modified or new relevant data within five working days after such modification or the appearance of new data.
165. In the cases provided for in the Regulations for the Register of Taxpayers, the taxpayer shall not be required to submit the data (a part thereof) specified in paragraphs 1 and 2 of this Article directly to the tax administrator (register management body) if analogous data is submitted to the respective state register with which the administrator of the register of taxpayers has concluded a contract on the receipt of data. In such cases, the taxpayers shall be registered and the data thereon shall be updated in the register of taxpayers on the basis of information provided to the tax administrator by the respective state register. Article
166. The Taxpayer Identification Number
167. Every person registered as a taxpayer shall be assigned a taxpayer identification number.
168. The identification code of the legal entities register shall be used to identify legal persons; the identification code of the population register shall be used to identify natural persons.
169. Those taxpayers who, for some reason, cannot use the identification code of the legal entities register or the identification code of the population register, shall be assigned a taxpayer identification number to be applied in accordance with the procedure established by the central tax administrator (the leading register management body).
170. The taxpayers must specify their identification numbers in tax returns and other documents concerning payments to the budget. SECTION THREE THIRD PERSONS AND THEIR OBLIGATIONS Article
171. Purposes of Establishing Obligations for Third Persons The obligations of third persons in the field of applying tax administration procedures relating to the provision of information to the tax administrator, enforced recovery of arrears in payments and prevention of violations of tax laws shall be established with a view to ensuring the required conditions for an effective performance of the tax administrator’s functions. Article
172. Provision of Information Necessary for the Tax Administrator to Perform its Functions
173. Unless the laws provide otherwise, the information and data specified in subparagraph 1 of Article 33 of this Law as are necessary for the tax administrator to perform its functions shall be submitted not later than within ten days from the date of receipt of instructions from the relevant tax administrator or within a longer time limit set forth by the tax administrator.
174. Commercial or bank secrets may not serve as grounds for refusal to provide information. A professional secret may only serve as grounds for refusal to submit information where this is provided for in the laws and where this Law does not explicitly impose an obligation to submit the aforementioned information. Article
175. Information Provided by Bailiffs and Notaries
176. Bailiffs and notaries shall provide data to the tax administrator about those legal facts which may give rise to liability to tax, and also other information necessary for the tax administrator to perform its functions.
177. After coordination with the Minister of Justice, the Minister of Finance shall determine the type, scope, time limits and manner of providing the data and information referred to in paragraph 1 of this Article as well as the procedure of providing such data and information to the tax administrator. Article
178. Information Provided by Licence Issuing Authorities A licence issuing authority shall provide information to the tax administrator concerning the issue of licences for certain persons to engage in a specific activity, the suspension of such licences, the revocation of suspensions or the revocation of licences, in a manner and within the time limits set out in a contract concluded between the licence issuing authority and the central tax administrator. Article
179. Information Provided by Authorities Registering Objects, Rights in Rem and Legal Facts An authority that registers objects, rights in rem and legal facts shall provide information to the tax administrator about the objects it registers (or objects subject to registration) in a manner and within the time limits set out in a contract concluded between said authority and the central tax administrator. Article
180. Information Provided by the Population Register Management Body The population register management body shall provide data from the population register to the tax administrator in a manner and within the time limits set out in a contract concluded between the leading population register management body and the central tax administrator. Article
181. Information Provided by the Legal Entities Register Manager The legal entities register manager shall provide data from the legal entities register to the tax administrator in a manner and within the time limits set out in a contract concluded between the said register manager and the central tax administrator. Article
182. Provision of Information about Opened and Closed Accounts Credit institutions shall provide information to the tax administrator about all types of accounts opened or closed by Lithuanian and foreign legal persons (branches and representative offices thereof) and natural persons. Such information shall be communicated to the State Tax Inspectorate under the Ministry of Finance in writing not later than within three working days after the opening or closure of the account or in any other manner and within other time limits set out in a contract between the credit institution and the central tax administrator. Article
183. Provision of Information about Loans Granted and Received
184. Legal persons registered in the Republic of Lithuania (except for credit institutions) shall annually provide, in accordance with the procedure and within the time limits set forth by the central tax administrator, information to the State Tax Inspectorate about loans and their amounts granted to natural persons and repaid by them as well as loans and their amounts received from natural persons.
185. Credit institutions shall provide information to the State Tax Inspectorate about loans and their amounts granted to natural persons for the purpose of housing and repaid by them as well as amounts of interest paid by natural persons on these loans. Such information shall be communicated annually in accordance with the procedure and within the time limits set forth by the central tax administrator.
186. Financial institutions, as they are defined in the Law on Financial Institutions, shall annually provide, in accordance with the procedure and within the time limits set forth by the central tax administrator, information to the State Tax Inspectorate about the amounts paid by natural persons (singling out interest) for the financial lease (leasing) of housing. Article
187. Provision of Information about Securities Acquired Intermediaries in public trading in securities shall annually provide, in accordance with the procedure and within the time limits set forth by the central tax administrator, information to the State Tax Inspectorate about the securities acquired by persons. Article
188. Provision of Information about Payments for Studies Scientific and educational establishments registered in the Republic of Lithuania shall provide, on an annual basis and in accordance with the procedure and within the time limits set forth by the central tax administrator, information to the State Tax Inspectorate about the amounts paid for the studies of natural persons (for the benefit thereof) where higher education and/or qualifications are obtained upon graduation, and also for doctoral studies and art post-graduate studies. Article
189. Provision of Information about Life Insurance Premiums Paid Insurance undertakings registered in the Republic of Lithuania shall provide, on an annual basis and in accordance with the procedure and within the time limits set forth by the central tax administrator, information to the State Tax Inspectorate about the amounts of life insurance premiums paid by natural persons (for the benefit thereof). Article
190. Provision of Information about Pension Insurance Premiums Paid Pension insurance premiums accepting funds registered in the Republic of Lithuania shall provide, on an annual basis and in accordance with the procedure and within the time limits set forth by the central tax administrator, information to the State Tax Inspectorate about the amounts of pension insurance premiums paid by persons (for the benefit thereof). Article
191. Provision of Information Necessary for the Implementation of Council Directive 2003/48/EC Third persons, in accordance with the procedure established by the central tax administrator, shall provide to the State Tax Inspectorate information necessary for the implementation of Council Directive 2003/48/EC of 3 June 2003 on taxation of savings income in the form of interest payments. A list of data to be provided and categories of entities required to provide such data shall be established by the Government of the Republic of Lithuania or a body authorised by it. Article
192. Compliance with Instructions to Eliminate the Circumstances and Conditions Precluding the Tax Administrator from Performing its Functions Properly Persons must comply with the instructions given by the tax administrator to eliminate the circumstances and conditions precluding the tax administrator from performing its functions properly within a reasonable (optimal) time limit set forth by the tax administrator, unless the laws provide otherwise. Where it is impossible to carry out the instructions due to objective reasons, a person shall immediately inform the tax administrator thereof. The tax administrator shall be informed about the measures taken within three working days after compliance with the instructions given. Article
193. Compliance with Instructions to Write Off Arrears in Payments from a Person’s Account in a Credit Institution
194. A credit institution must fully comply with the instructions given by the tax administrator to write off arrears in payments from a person’s account. Such instructions by the tax administrator must be taken and carried out even in the event that there is no money in the taxpayer’s account or its amount is smaller than the amount to be written off. In that case, the write off shall be effected until the whole amount specified in the instructions is written off. The tax administrator shall reduce the amount to be written off as specified in its instructions given to the credit institution if the arrears in payments are partly covered in another manner. In this case, the tax administrator shall immediately inform the credit institution about the reduction in the claim and the latter shall carry out the instructions with regard to the updated amount.
195. If the credit institution receives instructions given by the tax administrator to write off the amounts of arrears in payments from a person’s account or a corresponding bailiff order or a decision by other state institutions on enforced recovery and there are not enough funds in the taxpayer’s account to comply with all of the aforementioned decisions or instructions, the credit institution must carry out the instructions of the tax administrator, taking into account the priority of satisfying claims as laid down in Article 754 of the Code of Civil Procedure and the date of submission of the said documents. In the case specified in paragraph 1 of this Article, where the tax administrator reduces the amount to be written off, the date of submission of the instructions shall remain the same. Article
196. Ensuring the Use of Taxpayer Identification Number Where possible, credit institutions shall ensure that instructions given by the taxpayer to transfer amounts to the budget indicate the taxpayer identification number and that the identification number be transferred via the bank-to bank system of settlement. Article
197. Other Obligations Third persons shall discharge other obligations set out in this and other laws and subordinate legal acts, related to the performance of tax administrator’s functions and the exercise of its rights. CHAPTER V CALCULATION, PAYMENT AND RECOVERY OF TAXES SECTION ONE CALCULATION OF TAXES Article
198. Calculation and Re-Calculation of Taxes
199. The tax due shall be calculated by the taxpayer in compliance with tax legislation, save for the exemptions provided for in the relevant tax legislation. If the taxpayer notices that the tax has not been calculated correctly, he shall re-calculate it.
200. In cases where the taxpayer has failed to calculate the tax in accordance with the procedure laid down in the legal acts or has failed to re-calculate it after incorrect calculation, the tax due to be paid by the taxpayer shall be calculated by the tax administrator on the basis of tax returns, accounting and other documents submitted by the taxpayer or in any other special manner of calculating taxes as provided for in this chapter.
201. For the purpose of this Law, unless the relevant articles provide otherwise, the concept of tax calculation shall also include the withholding of tax by the withholding agent. Article
202. Correct Calculation of Taxes: Substantiation
203. The tax administrator must substantiate the tax and related amounts calculated in respect of the taxpayer.
204. Where the taxpayer disagrees with a specific tax and related amounts calculated by the tax administrator, he must substantiate the incorrect calculation thereof. Article
205. Limitation Period for Calculating and Re-Calculating Taxes
206. Unless the relevant tax law provides otherwise, the taxpayer or the tax administrator may calculate or re-calculate the tax in respect of a period not exceeding the current calendar year and five preceding calendar years counting back from January 1st of the year when the tax was started to be calculated or re-calculated.
207. Where the tax administrator conducts a reinspection in accordance with the procedure laid down in this Law, the provisions of paragraph 1 of this Article shall not apply, but the tax administrator may not calculate the tax for a period exceeding the period in respect of which the tax was calculated in the course of the initial inspection.
208. The tax may be calculated or re-calculated in respect of a period exceeding the period specified in paragraph 1 only in the event that a criminal case requires that the damage caused to the State be determined and the limitation periods set out in the Criminal Code for passing a conviction have not expired.
209. With regard to customs duties, the provisions of this Article shall apply in so far as they do not contravene the Community customs legislation. Article
210. Calculation of Tax Based on the Precedence of Content over Form
211. In cases where a taxpayer’s transaction, economic operation or any combination thereof is concluded with a view to gaining a tax benefit, i.e. to defer, directly or indirectly, the deadline for the payment of tax, reduce the payable amount of tax or fully avoid the payment of taxes, or increase the tax overpayment (tax difference) to be refunded (credited), or shorten the time limit for refunding the tax overpayment (tax difference), the tax administrator shall apply the content-over-form principle for the purpose of calculating the tax. In this case, the tax administrator shall not take account of the formal expression of the taxpayer’s activity and shall recreate the distorted or hidden circumstances associated with taxation as provided for in tax laws and calculate the tax pursuant to the relevant provisions of the said tax laws.
212. In cases where the taxpayer makes a mistake when compiling the accounting documents and filing a tax return, and also in other cases where the taxpayer’s activity does not comply with the formal requirements of legal acts, although the content of such activity corresponds to the circumstances associated with taxation as provided for in tax laws, the tax shall be calculated pursuant to the relevant provisions of the said tax laws. Article
213. Calculation of Tax Based on Assessment by the Tax Administrator
214. In cases where the taxpayer fails to discharge or properly discharge his obligation to calculate taxes, co-operate with the tax administrator, keep accounts, safekeep the accounting and other documents, which precludes the tax administrator from determining the amount of the taxpayer’s tax liability pursuant to the standard procedure, i.e. a procedure laid down in the relevant tax law, the tax administrator shall assess the amount of tax to be paid by the taxpayer, taking into account all of the circumstances relevant for the assessment, the information available and, if necessary, selecting the methods of assessment laid down by him that comply with the criteria of prudence and, in so far as objectively feasible, fairness in determining the amount of tax liability.
215. The central tax administrator shall, within its sphere of competence and after coordination with the Minister of Finance, establish a detailed procedure for implementing this Article. Article
216. Agreement on Tax Amount
217. The tax administrator and the taxpayer may conclude an agreement regarding taxes and related amounts, provided that for the purpose of calculating taxes neither of the parties has sufficient evidence to substantiate their calculations. After having signed such an agreement, the taxpayer shall lose the right to dispute the correctness of tax calculation and the tax administrator shall lose the right to calculate an amount larger than specified in the agreement. The aforementioned agreement may be signed in the course of a tax inspection or tax investigation as well as during all of the stages of the settlement of tax disputes.
218. The provisions of this Article shall not apply to the administration of customs duties. Article
219. Calculation of Tax Based on Documents of Other State Institutions
220. The tax administrator shall have the right to calculate taxes based on the acts and documents of other state institutions and agencies by drawing up an inspection report in accordance with the procedure laid down in this Law.
221. Taxes may be calculated in the manner set out in paragraph 1 of this Article in cases where the institutions referred to in the aforementioned paragraph, within their spheres of competence prescribed by law, inspect the commercial, economic and financial activities carried on by persons and establish violations of tax laws but are not authorised to take any action in the framework of tax administration according to the procedure laid down in this Law. In this case, the tax administrator shall not be required to once again verify the correctness of the calculation, declaration and payment of taxes by the taxpayer.
222. In case of any doubt arising as to the substantiation and correctness of the calculations made by the institutions referred to in paragraph 1 of this Article, the tax administrator shall have the right to request, specifying the reasons for disagreement, that the said institutions conduct a reinspection or to verify in accordance with the procedure established by this Law whether the tax has been calculated, declared and paid correctly.
223. After having calculated taxes in accordance with the procedure laid down in this Article, the tax administrator shall assume all responsibility for the correctness of such calculation. SECTION TWO TAX RETURNS Article
224. General Provisions
225. The taxpayer shall independently declare all the taxes to be paid, except for the cases explicitly stated in the relevant tax laws. It shall be presumed that the data indicated in tax returns are correct.
226. Unless the relevant tax law provides otherwise, a separate tax return shall be filed in respect of each tax to be paid by the taxpayer.
227. A tax return may have supplements. Such supplements shall form an integral part of the tax return. Article
228. Form of Tax Return Unless the tax law provides otherwise, the form of the relevant tax return as well as the procedure for completing and filing it shall be approved by the central tax administrator. Article
229. Filing Tax Returns
230. Tax returns shall be filed in writing.
231. In the cases specified in this Law as well as in the cases and subject to the procedure set forth by the central tax administrator, tax returns may also be filed electronically.
232. The taxpayer shall have the right to choose the manner of filing a tax return. Article
233. Time Limits for Filing Tax Returns
234. Tax returns shall be submitted to the relevant tax administrator within the time limits laid down in the tax law.
235. The deadline for filing a tax return may be extended subject to the procedure and time limits set forth by the central tax administrator in the event of the death of the taxpayer (natural person) or the death of the owner of a legal person of unlimited civil liability as well as in other cases specified by the central tax administrator.
236. Where liability to tax is created in the course of time provided for filing a tax return, the taxpayer shall pay the tax within the time limit laid down in the tax law, notwithstanding that the deadline for filing the tax return has been extended.
237. In the event that the tax return filed by the taxpayer contained deficiencies that were eliminated in accordance with the procedure laid down in Chapter VII of this Law, it shall be regarded as submitted on the day of filing the original tax return. Article
238. Exempting Taxpayers Engaged in No Activity from Filing Tax Returns
239. Those taxpayers that are not engaged in any activity may be temporarily exempted from filing specific tax returns subject to the procedure and within the time limits set forth by the central tax administrator. The criteria for being engaged in no activity shall be set forth by the central tax administrator.
240. Where liability to tax is created in the course of time provided for temporary exemption from filing tax returns, the taxpayer shall pay the tax within the time limit laid down in the tax law, notwithstanding the temporary exemption from filing tax returns. Article
241. Filing Tax Returns by Legal Entities in Liquidation or Reorganisation Unless the relevant tax law provides otherwise, the taxpayer (legal person) shall within 30 days after the initiation of its liquidation, bankruptcy, reorganisation or restructuring procedure submit to the tax administrator the relevant tax return for the period from the beginning of the tax period until the initiation of the said procedures. The submission of the tax return shall not exempt the taxpayer from the obligation to file a tax return covering all the tax period, provided that it ends before the said procedures are completed. Article
242. Signature on Tax Returns
243. A tax return shall be signed by the taxpayer or his representative as well as other persons specified in the instructions for completing the relevant tax return.
244. A tax return filed in electronic format shall be affirmed by an electronic signature or in any other manner verifying the identity of the taxpayer who has filed the tax return. Article
245. Adjustment of Tax Returns
246. A taxpayer shall have the right to adjust the tax return if the time limit for the calculation (re-calculation) of taxes laid down in Article 68 of this Law has not expired.
247. The procedure for adjusting tax returns shall be established by the central tax administrator. SECTION THREE TAX OBLIGATIONS Article
248. Discharge of Tax Obligations
249. The taxpayer shall pay taxes within the time limit laid down in the relevant tax law or a subordinate legal act adopted on the basis of the said law.
250. The taxpayer shall pay the amounts of calculated taxes, penalties and late payment interest specified in the decision on the approval of the inspection report within 20 days from the date of receipt of the said decision, unless another time limit is laid down in a specific tax law.
251. Arrears in payments deferred in accordance with the procedure laid down in this Law shall be discharged within the time limits set out in a tax instalment agreement.
252. The procedure for the payment of taxes administered by the Customs (including additionally calculated taxes) shall be established by the Government. Article
253. Manner of Discharging Tax Obligations A specific taxpayer shall be deemed to have discharged a tax obligation, provided that: 1) the tax and related amounts have been paid; 2) the taxpayer’s arrears in payments have been taken over by a third person; 3) the tax overpayment (tax difference) has been credited against the taxpayer’s arrears in payments. Article
254. Payment of Taxes
255. Taxes and/or related amounts shall be paid through a credit institution or any other payment accepting body. In the cases and subject to the procedure prescribed in the legal acts, taxes may be paid in cash through tax officer authorised to accept cash.
256. Taxes and related amounts shall be deemed to have been paid where a credit institution or any other payment accepting body carries out the relevant instructions given by the taxpayer in accordance with the procedure established in Article 9 of the Law on Payments.
257. Taxes and related amounts may be paid by third persons on behalf of the taxpayer in accordance with the procedure established by the central tax administrator.
258. The concept of payment of taxes and related amounts shall also include the payment of taxes and related amounts by the withholding agent. Article
259. Crediting of Amounts Paid by the Taxpayer
260. Amounts paid by the taxpayer shall be credited in accordance with the procedure laid down by the taxpayer in payment instructions. If the taxpayer does not specify against what the paid amount should be credited, it shall be credited in accordance with the procedure established by the central tax administrator.
261. As regards taxes administered by the Customs, the Government may establish another procedure for crediting the amounts paid. Article
262. Allocation of Taxes
263. Taxes shall be allocated as prescribed in the Law on Budgeting and other relevant tax laws. Where the laws do not specify how taxes should be allocated, they shall be entered in the state budget.
264. Unless a specific tax law prescribes otherwise, the amounts of late payment interest, penalties, interest paid under a tax instalment agreement and late payment penalties on such interest shall be allocated in accordance with the same procedure as related taxes. Article
265. Taking Over Arrears in Payments The taxpayer’s arrears in payments may be taken over by other persons in accordance with the procedure established by the Government or an institution authorised by it. Such persons shall be subject to all the provisions of tax laws regulating the payment and recovery of arrears in payments as applicable to the taxpayer. Article
266. Crediting and Refunding Tax Overpayments
267. Tax amounts overpaid by the taxpayer shall be credited against the taxpayer’s arrears in payments in accordance with the procedure established by the central tax administrator.
268. Amounts of personal income tax overpaid by the withholding agent may be credited only against personal income tax and related amounts and only in the event that they have not resulted from an excessive income tax withheld.
269. Excessive state social insurance contributions may not be credited against other tax arrears, while other tax overpayments may not be credited against state social insurance contributions.
270. The procedure for crediting the overpayment of taxes administered by the Customs against other tax arrears and the procedure for crediting other tax overpayments against the arrears in taxes administered by the Customs shall be established by the Minister of Finance.
271. Tax amounts overpaid by the taxpayer that remain after crediting such amounts against the arrears in payments shall be refunded at the request of the taxpayer.
272. The tax administrator shall have the right to verify, in accordance with the procedure and within the time limits laid down in this Law, whether or not the taxpayer’s request to refund the tax overpayment is substantiated. Where a tax inspection is conducted in respect of refunding the tax overpayment, it shall be commenced within 20 days after the expiry of the time limits laid down in subparagraph 1 of paragraph 7 of this Article.
273. Unless the relevant tax law provides otherwise, the tax administrator shall refund the tax overpayment to the taxpayer as follows: 1) the tax overpayment shall be refunded within 30 days from the date of receipt of a written request to refund the tax overpayment. A personal income tax overpayment due to be refunded to the taxpayer on the basis of his annual income tax return shall be refunded at the request of the taxpayer not later than by July 31st of the respective year and, if the request is submitted after the deadline set for submitting the relevant annual tax return, not later than within 90 days from the date of receipt of the request to refund the tax overpayment. The time limits laid down in this subparagraph shall not apply in the event of circumstances referred to in subparagraph 2 of this paragraph; 2) in cases where a tax inspection is conducted with respect to refunding a tax overpayment or where issues related to the refunding of a tax overpayment constitute an integral part of the inspection conducted by the tax administrator in respect of the taxpayer, the tax overpayment shall be refunded not later than within 20 days after the tax administrator’s decision on the inspection report (or a certificate where no violations have been established) is communicated to the taxpayer.
274. Tax amounts and interest calculated for the benefit of the taxpayer shall be refunded to the taxpayer from the budgets whereto the respective tax amounts were paid (entered) or from the budgets that have taken over their rights or obligations. The said amounts shall be paid in the proportions used for tax allocation at the time of the refund.
275. If the tax administrator fails to refund the tax overpayment within the time limit laid down in paragraph 7 of this Article, it shall calculate interest thereon for the benefit of the taxpayer until the tax overpayment is refunded. The amount of such interest shall be equal to the amount of late payment interest for delayed payment of tax.
276. If the taxpayer prefers to have the tax overpayment credited against taxes the time limit for the payment of which has not expired and also against taxes in the Customs subject to the procedure established by the Minister of Finance, he shall submit an appropriate request concerning the matter.
277. The procedure for submitting requests to refund or credit the tax overpayment and the forms of such requests shall be established by the central tax administrator. The central tax administrator shall have the right to establish a list of documents to be attached to the request and the cases for refunding a tax overpayment without a separate request.
278. Unless the relevant tax law provides otherwise, the overpayment of a tax related amount and the related tax difference shall be refunded (credited) in accordance with the same procedure as the tax overpayment.
279. Unless the relevant tax law provides otherwise, the tax overpayment may be refunded (credited), provided that it was accrued not earlier than during the current calendar year and five preceding calendar years counting back from the date of crediting, or, at the request of the taxpayer, counting back from the date of submission of the request. Where, before the submission of the request, the taxpayer performs an action evidencing his knowledge about the existence of a tax overpayment, the said time limit shall be calculated starting on the day on which the action was performed. The said time limit shall not include the calendar year during which tax or judicial disputes were in process or mutual agreement procedures were applied under double taxation treaties concluded and brought into effect by the Republic of Lithuania or under the Convention on the elimination of double taxation in connection with the adjustment of profits of associated enterprises (90/436/EEC).
280. With regard to customs duty overpayments, the provisions of this Article shall apply only in so far as they do not contravene the Community customs legislation. Article
281. Deferral or Spread of Arrears in Payments
282. The local tax administrator may defer or spread the time limit for discharging arrears in payments in compliance with the procedure established by the Minister of Finance. The discharge of arrears in payments shall be deferred or spread by the decision of a local tax administrator. On the basis of such a decision, a tax instalment agreement shall be concluded between the taxpayer and the tax administrator.
283. The decision to defer the discharge of arrears in payments may be made only where it is established that an immediate discharge would result in a critical financial position of the taxpayer or that the taxpayer would face major financial difficulties in discharging other financial obligations, while the deferral or spread of the discharge of arrears in payments would allow the taxpayer to stabilise his financial position and discharge arrears in payments later on.
284. The decision to defer or spread the time limit for discharging arrears in payments may be made only where the taxpayer’s request is accompanied by documents substantiating the existence of a real possibility to discharge the arrears in payments over the requested deferral period.
285. In the event of deferral or spread of the time limit for discharging arrears in payments, the taxpayer may be requested to secure the discharge of arrears in payments by mortgage, suretyship or guarantee in accordance with the procedure laid down in the Civil Code.
286. Interest shall be paid under a tax instalment agreement the amount of which shall be established by the Minister of Finance, taking account the weighted average of the annual interest rate for the Treasury bills of the Republic of Lithuania, issued in litas by auction in the previous quarter. Where the taxpayer fails to make timely payments according to the schedule of payments approved by the tax instalment agreement, an increased amount of interest shall be calculated; where interest is not paid under a tax instalment agreement, late payment penalties shall be paid on such interest. Increased interest and late payment penalties on interest shall be calculated until the relevant amounts are paid (credited). The amount of increased interest and late payment penalties on interest shall be equal to the amount of late payment interest for delayed payment of tax.
287. Where a taxpayer does not comply with the terms and conditions of the tax instalment agreement, it shall be terminated. In this case, the amount of interest paid under a tax instalment agreement shall be recalculated, taking into account the actual amount of tax instalments used, while interest shall be calculated uninterruptedly on the remaining unpaid amounts in accordance with the procedure laid down in Article 96-98 of this Law. The tax instalment agreement shall also be terminated where bankruptcy proceedings are initiated against the taxpayer.
288. The provisions of this Article shall not apply to personal income tax withholding agents, except where a request is made to extend the time limit for the payment of personal income tax and related amounts calculated additionally in the course of a tax inspection.
289. The provisions of this Article shall apply to customs duties and related amounts in so far as they do not contravene the Community customs legislation. Article
290. Reminder to Discharge Tax Obligations on a Voluntary Basis
291. The tax administrator shall communicate to the taxpayer who fails to discharge tax obligations in due time a reminder to pay taxes and related amounts voluntarily. The reminder of payment shall be communicated in one of the following cases: 1) a decision on the taxpayer’s appeal in a tax dispute comes into effect, i.e. after an appeal against the tax administrator’s decision on the approval of the inspection report is filed, the tax dispute settlement institution does not satisfy the taxpayer’s appeal and the taxpayer does not appeal against such a decision within the prescribed time limit; or the decision of the tax dispute settlement institution, which does not satisfy the taxpayer’s appeal, is final; 2) a negative decision is adopted in respect of the taxpayer’s request to defer or spread the time limit for discharging arrears in payments; 3) a tax instalment agreement is terminated.
292. The reminder of payment shall not be communicated where: 1) arrears in declared taxes and/or late payment interest on such taxes or arrears in taxes calculated in the customs declaration and/or late payment interest on such taxes are established; 2) arrears in taxes and related amounts unpaid within the time limit laid down in paragraph 2 of Article 81 of this Law are calculated in the course of a tax inspection conducted by the tax administrator.
293. The tax administrator shall allow the taxpayer to pay the amounts specified in the reminder within 20 days from the date of its communication to the taxpayer, unless another time limit is laid down in the tax law. Article
294. Procedure for Discharging Tax Obligations of Legal Persons under Liquidation
295. Arrears in payments of a legal person in liquidation shall be covered from its monetary funds and from the funds obtained after the sale of its assets, taking into account the priority of satisfying claims as established by law.
296. In cases where the assets of a legal person of unlimited liability in liquidation are not sufficient to cover its arrears in payments, the remaining portion of such arrears may be recovered from the assets of members of the said legal person, which are liable for its obligations in the cases and subject to the procedure prescribed by the laws of the Republic of Lithuania.
297. Where a legal person in liquidation fully discharges its tax obligations, any tax overpayment shall be refunded in accordance with the procedure laid down in Article 87 of this Law. Tax overpayments of a legal person of unlimited civil liability shall be refunded to its members after liquidation.
298. The State Tax Inspectorate shall notify the manager of the legal entities register about the settlements completed by legal persons in liquidation with the budget. Article
299. Discharging Tax Obligations of Legal Persons under Reorganisation or Transformation
300. The tax obligations of a reorganised legal person shall be discharged by the successor to its rights and obligations. Members of the reorganised legal person, where they are liable for its obligations, shall also be held liable for discharging the tax obligations of the legal person in the cases and subject to the procedure prescribed by the Civil Code.
301. The successor to the rights and obligations of a reorganised legal person shall take over the obligation to cover all the unpaid taxes and related amounts thereof (including the amounts which become known after reorganisation).
302. In cases where a legal person under reorganisation has no arrears in payments, any tax overpayment of the reorganised legal person shall be refunded (credited) in respect of the successor to the rights and obligations thereof in accordance with the procedure laid down in Article 87 of this Law. This provision shall also apply in the event that tax overpayment becomes known after reorganisation.
303. The provisions of paragraphs 1 and 3 of this Article shall also apply to public and private companies under division.
304. The tax obligations of a transformed legal person shall be discharged under a general procedure by the legal person operating after such transformation. Article
305. Discharging Tax Obligations of Deceased Natural Persons Arrears in payments of a deceased natural person shall be covered by the inheritors of his estate in accordance with the procedure laid down in the Civil Code. Article
306. Cessation of Tax Obligations
307. A tax obligation shall cease where: 1) the tax obligation is discharged; 2) the tax administrator has enforced the recovery of the taxpayer’s arrears in payments; 3) the tax administrator and the taxpayer reach an agreement in the cases prescribed by law; 4) the taxpayer is exempt from discharging tax obligations in the cases prescribed by law; 5) the debtor and the creditor are the same person; 6) a legal person has been liquidated, except for the cases prescribed by law where the obligation has to be discharged by other persons; 7) a natural person has died and it is not possible to cover the arrears in payments from his estate.
308. In addition to the cases specified in paragraph 1 of this Article, any obligation with respect to the taxes administered by the Customs shall also cease where the goods are declared for customs clearance and: 1) the customs declaration is acknowledged as invalid; 2) the goods are detained before their release and, at the same time or later, seized, destroyed or transferred into the ownership of the State as instructed by the Customs, or destroyed or irreversibly lost for reasons attributable to their nature, fortuitous events or force majeure; 3) if the goods are detained during their illegal entry and, at the same time or later, seized.
309. Where the tax administrator transfers its claims to the company Turto Bankas, arrears in payments shall be written off from the budget revenue accounts. Article
310. Specific Features concerning the Discharge and Cessation of Tax Obligations of Companies under Restructuring and Bankruptcy The laws of the Republic of Lithuania and subordinate legal acts adopted on their basis, which regulate company restructuring and bankruptcy proceedings, may prescribe special rules for discharging tax obligations, the manner of such a discharge and the grounds for the cessation thereof. In such cases, this Law shall apply in so far as the relevant issues are not regulated by the said laws. SECTION FOUR ENFORCEMENT OF TAX OBLIGATIONS Article
311. Methods of Enforcing Tax Obligations
312. Methods of enforcing tax obligations are as follows: 1) late payment interest; 2) seizure of property; 3) instructions given to a credit institution to terminate the withdrawal and transfer of money from the taxpayer’s account (accounts); 4) mortgage; 5) suretyship or guarantee, including cases where suretyship or guarantee is used to enforce a potential tax obligation.
313. The application of the methods of enforcing tax obligations as specified in subparagraphs 2-5 of paragraph 1 of this Article shall not eliminate the taxpayer’s obligation to pay late payment interest calculated by the tax administrator.
314. The tax administrator may also use other statutory methods of enforcing existing or potential tax obligations. Article
315. Late Payment Interest
316. Late payment interest shall be calculated in respect of the taxpayer: 1) for taxes declared by the taxpayer but not paid or not paid on time to the budget or for taxes calculated (including the tax calculated in the customs declaration) by the taxpayer (in the cases specified in the relevant tax law, by the tax administrator) but not subject to declaration; 2) for taxes subject to declaration but not declared and not paid or not paid on time as determined by the tax administrator in the course of a tax inspection or for non-calculated taxes not subject to declaration (including the tax which had to be calculated in the customs declaration); 3) for a tax overpayment refunded (credited) without due grounds at the request of the taxpayer (except for the cases where an undue tax overpayment is refunded (credited) in error by the tax administrator).
317. Unless the relevant tax law provides otherwise, this method of enforcing tax obligations shall not apply to budget-financed institutions and the Bank of Lithuania. Article
318. Commencement of Calculating Late Payment Interest
319. In the case specified in subparagraph 1 of paragraph 1 of Article 96, late payment interest shall be calculated beginning with the day after the day on which the tax had to be paid to the budget in compliance with the tax legislation in force at that time.
320. In the case specified in subparagraph 2 of paragraph 1 of Article 96 of this Law, late payment interest shall be calculated beginning with the day after the day on which the tax had to be paid to the budget in compliance with the tax legislation in force at that time until the day on which the inspection report was completed and, in the case of failure to pay the tax within the time limit laid down in paragraph 2 of Article 81 of this Law, late payment interest shall continue to be calculated from the day following the expiry of the said time limit.
321. In the case specified in subparagraph 3 of paragraph 1 of Article 96 of this Law, late payment interest shall be calculated beginning with the day on which the tax overpayment was refunded (credited).
322. The provisions of this Article shall apply to late payment interest for unpaid customs duties in so far as they do not contravene the Community customs legislation. Article
323. Time Period for Calculating Late Payment Interest
324. Late payment interest the calculation of which commenced subject to the procedure laid down in Article 97 of this Law shall be calculated every day until: 1) the day (inclusive) on which the tax was paid (refunded) to the budget or 2) the day on which the tax obligation ceases on grounds other than specified in Article 93 of this Law.
325. Late payment interest the calculation of which commenced subject to the procedure laid down in paragraphs 1 and 2 of Article 97 of this Law shall be calculated for a period not exceeding 180 days from the day on which the right to enforce the recovery of arrears in payments is created and, if the taxpayer fails to pay self-calculated taxes not subject to declaration (or, in the cases specified in the relevant tax law, calculated by the tax administrator) for a period not exceeding 180 days from the deadline for payment laid down in the relevant tax law. Where the enforced recovery of taxes is suspended in the case specified in paragraph 1 of Article 110 of this Law, late payment interest shall be calculated for the whole period of suspension if the taxpayer’s appeal is rejected.
326. Legal acts providing for a shorter period for calculating late payment interest shall be applied to late payment interest the calculation whereof commenced after their entry into force. The calculation of late payment interest, which commenced before the said legal acts entered into force, shall continue for a period not exceeding that prescribed by these legal acts. In the event that late payment interest was calculated before the said legal acts entered into force for a period exceeding that prescribed by these legal acts, the calculation of late payment interest shall be terminated.
327. The provisions of paragraphs 2 and 3 of this Article shall not apply for the purpose of calculating late payment interest for unpaid customs duties. Article
328. Amount of Late Payment Interest The amount of late payment interest and the procedure of its calculation shall be established by the Minister of Finance, taking into account the weighted average of the annual interest rate for the Treasury bills of the Republic of Lithuania, issued in litas by auction in the previous quarter. The amount of late payment interest shall be established by increasing the said interest rate by 10 percentage points. Article
329. Exemption from Late Payment Interest
330. The taxpayer may be exempt from late payment interest, calculated but not paid (recovered), or a part thereof, provided that: 1) late payment interest was calculated on an underpayment of one single tax while the taxpayer had an overpayment of the same or another tax for the same period and Article 87 of this Law does not prohibit to credit the specified amounts; 2) there is a basis provided for in paragraph 1 of Article 141 of this Law; 3) in cases where it is not feasible to recover late payment interest in economic and/or social terms within the meaning of subparagraph 3 of paragraph 1 of Article 113 of this Law. The said basis for exemption may be applied only in respect of those taxpayers who are natural persons.
331. Exemption from late payment interest may be granted by the tax administrator or, in the event of a tax dispute, by a tax dispute settlement institution. Where the adoption of a decision falls within the competence of the tax administrator, the procedure of exemption from late payment interest shall be established by the central tax administrator.
332. A refusal to grant exemption from late payment interest may be appealed against by the taxpayer in accordance with the procedure laid down in Chapter IX of this Law.
333. For the purpose of adopting decisions to exempt from or not to impose late payment interest in respect of unpaid customs duties, the provisions of this Article shall apply in so far as they do not contravene the Community customs legislation. Article
334. Seizure of Property
335. Seizure of property shall mean a compulsory temporary restriction, subject to the procedure and conditions set out in this and other laws, of the taxpayer’s rights of ownership with respect to his property or of separate constituent parts of such rights, in particular the management, use and disposal of property, in order to enforce a tax obligation.
336. The seizure of property shall be limited to securing, actually and fully, the recovery of arrears in payments and covering the expenses relating to such seizure and recovery.
337. A taxpayer’s property may be seized where the taxpayer has failed to pay taxes and related amounts in accordance with the procedure laid down in the tax law or where, after the tax administrator has adopted a decision on the approval of the inspection report, there are sufficient grounds for believing that the taxpayer may conceal, sell or otherwise dispose of his property and as a consequence it may be difficult or impossible to recover taxes and related amounts.
338. A taxpayer’s property may also be seized where violations of tax laws are established in the course of a tax inspection or in the course of carrying out an instruction to provide an expert’s opinion and where there are reasonable grounds for believing that the taxpayer may conceal, sell or otherwise dispose of his property and as a consequence it may be difficult or impossible to recover taxes and related amounts. In this case, only that property may be seized which is registered in the relevant property register; a tax overpayment (tax difference) due to be refunded to the taxpayer may also be seized.
339. The tax administrator shall appraise the property to be seized at market prices. Where the taxpayer disagrees with such an appraisal, he shall be entitled to appeal against it in accordance with the procedure laid down in the laws.
340. The rules laid down in paragraphs 1, 2, 4 and 5 of Article 675, Articles 677, 678, 679, 680, 683, 684, paragraphs 1 and 2 of Article 686, and Article 688 of Chapter XLVIII of the Code of Civil Procedure shall apply mutatis mutandis to the seizure of property carried out by the tax administrator. In this case, a tax officer shall have the same rights and duties in respect of the taxpayer and third persons as the bailiff who seizes property in accordance with the procedure laid down in the Code. Article
341. Instructing Credit Institutions to Terminate the Withdrawal and Transfer of Money from the Taxpayer’s Account (Accounts) The tax administrator shall have the right to instruct credit institutions to terminate the withdrawal and transfer of money from the taxpayer’s account (accounts) if the taxpayer does not allow to inspect whether the taxes have been calculated and paid correctly or if a decision has been adopted in respect of the taxpayer to write off arrears in payments from a person’s account with a credit institution. Article
342. Mortgage With a view to enforcing a tax obligation, the tax administrator shall have the right: 1) to apply for the registration of compulsory mortgage of the taxpayer’s property in accordance with the procedure laid down in the Code of Civil Procedure; 2) to conclude a mortgage agreement with the taxpayer. Article
343. Request for Suretyship or Guarantee
344. A guarantor may be a person of the Republic of Lithuania registered with the central tax administrator in accordance with the procedure established by the latter, including a bank, an insurance undertaking or any other third person, and also any other third person established in the Community as complying with the criteria set forth by the Government or an institution authorised by it.
345. Unless the relevant tax law provides otherwise, the procedure for accepting and using suretyship or guarantee documents shall be established by the Government or an institution authorised by it.
346. The central tax administrator may establish the forms of documents to be issued by guarantors. SECTION FIVE ENFORCED RECOVERY OF ARREARS IN PAYMENTS Article
347. Tax Administrator’s Right to Enforce the Recovery of Arrears in Payments
348. The tax administrator shall acquire the right to enforce the recovery of the taxpayer’s arrears in payments based on at least one of the following grounds: 1) the taxpayer fails to pay the tax and related amounts specified in the reminder of payment issued by the tax administrator; 2) the taxpayer fails to pay the declared tax or a tax indicated in the customs declaration within the time limit laid down in the relevant tax law or a subordinate legal act adopted on the basis thereof; 3) the taxpayer fails to pay the tax and related amounts specified in the tax administrator’s decision on the approval of an inspection report within the time limit laid down in paragraph 2 of Article 81 of this Law.
349. The right to recover arrears in payments shall be acquired on the next day after the expiry of the time limit specified in the reminder to pay taxes and related amounts voluntarily and, if the reminder of payment is not sent, within 20 days after the expiry of the time limit laid down in subparagraphs 2 and 3 of paragraph 1 of this Article. In cases where after the expiry of the time limit for the payment of tax, the taxpayer files a delayed tax return late or files an adjusted tax return, the tax administrator shall acquire the right to recover the tax specified in the adjusted tax return and related late payment interest on the next day after the submission of said tax return.
350. The provisions of this Article shall apply to arrears in the payment of customs duties and related amounts in so far as they do not contravene the Community customs legislation. Article
351. Methods of Enforced Recovery of Arrears in Payments
352. The recovery of arrears in payments may be enforced as follows: 1) by instructing a credit institution to write off the amounts of arrears from a person’s account. Such an instruction shall be carried out subject to the procedure laid down in Article 63; 2) by filing a request with the guarantor to discharge the taxpayer’s obligations and pay his arrears (where the discharge of tax obligations is ensured by a suretyship or guarantee); 3) by instructing a credit institution to write off the amounts of arrears from the guarantor’s account in the event that the guarantor fails to fulfil the requirements laid down in subparagraph 2 of this Article. Such an instruction shall be carried out subject to the procedure laid down in Article 63; 4) by adopting a decision to enforce the recovery of arrears from the assets of the taxpayer or guarantor. This decision shall be enforced by bailiffs in accordance with the procedure laid down in the Code of Civil Procedure.
353. The provisions of paragraph 1 of this Article shall also apply where the tax administrator enforces recovery for the benefit of another state as specified in the laws or international treaties.
354. The tax administrator may transfer the right of recovery to another state as specified in the laws or international treaties.
355. The priority of the recovery measures referred to in paragraph 1 of this Article as well as the procedure and the grounds for their termination may be set out in other legal acts regulating the activities of the tax administrator. Article
356. Limitation Period for Enforced Recovery of Arrears in Payments
357. The period of limitation for the enforced recovery of arrears in taxes and related amounts shall be five years.
358. The period of limitation for the enforced recovery of tax arrears shall be calculated beginning with the day on which the right to enforce the recovery of tax arrears is created.
359. Upon the expiry of the period of limitation for the enforced recovery of tax arrears, the period of limitation for the recovery of related amounts shall also expire.
360. Upon the expiry of the period of limitation for the enforced recovery of arrears in payments, the tax administrator shall have no right to take any action of recovery or to credit, without the taxpayer’s request or consent, the tax overpayment (tax difference) against the arrears in payments in respect of which the period of limitation for enforced recovery has expired.
361. Where an enforcement procedure is initiated in the manner provided for in Article 106 of this Law, it shall be completed, notwithstanding that the period of limitation for the enforced recovery of arrears in payments has expired in the course of such procedure. In the event of failure to fully or partially recover the arrears in payments in specified cases, the enforcement procedure may be re-initiated only where the period of limitation for the enforced recovery of arrears in payments has not expired. Article
362. Grounds for Terminating the Limitation Period for Enforced Recovery of Arrears in Payments
363. The limitation period for the enforced recovery of arrears in payments shall terminate in the following cases: 1) the enforced recovery of arrears in payments is suspended on the grounds specified in paragraph 1 of Article 110; 2) the enforced recovery of arrears in payments is suspended on the grounds specified in paragraph 2 of Article 110; 3) a decision is adopted to suspend or not to enforce the recovery of arrears in payments pursuant to mutual agreement procedures under double taxation treaties concluded and brought into effect by the Republic of Lithuania or under the Convention on the elimination of double taxation in connection with the adjustment of profits of associated enterprises (90/436).
364. After the termination of the period for limitation for recovery, the limitation period for enforced recovery shall begin anew: 1) in the case specified in subparagraph 1 of paragraph 1 of this Article, from the day on which a decision on the taxpayer’s appeal in a tax dispute comes into effect, i.e. after an appeal against the tax administrator’s decision on the approval of the inspection report is filed, the tax dispute settlement institution does not satisfy the taxpayer’s appeal and the taxpayer does not appeal against such a decision within the prescribed time limit; or the decision of the tax dispute settlement institution, which does not satisfy the taxpayer’s appeal, is final; 2) in the case specified in subparagraph 2 of paragraph 1 of this Article, from the day on which the tax instalment agreement is terminated; 3) in the case specified in subparagraph 3 of paragraph 1 of this Article, from the day on which a mutual agreement procedure is completed. Article
365. Crediting and Allocating the Amounts of Arrears in Payments Recovered through Enforcement The amounts of arrears in payments recovered through enforcement shall be credited and allocated in accordance with the procedure laid down in Articles 84 and 85 of this Law. Article
366. Suspension of Enforced Recovery of Arrears in Payments
367. Unless a specific tax law provides otherwise, the submission of an appeal in the event of a tax dispute shall suspend the enforced recovery of disputed taxes, penalties and late payment interest as well as the crediting of the taxpayer’s tax overpayment (tax difference) against the said amounts (except for cases where the crediting is done at the taxpayer’s request), however it shall not qualify as an obstacle for applying the methods of enforcing tax obligations provided for in Article 95 or as the grounds for their elimination.
368. The conclusion of a tax instalment agreement shall suspend the enforced recovery of taxes and related amounts where the time limit for their payment is deferred.
369. The tax administrator, acting in compliance with the criteria of prudence and economic feasibility, shall have the right at its own initiative not to initiate or to suspend the enforcement proceedings. Article
370. Refunding of Amounts Recovered without Due Grounds through Enforcement Where it transpires that the tax administrator has recovered the tax and related amounts without due grounds, such amounts shall be refunded without delay in accordance with the procedure laid down in Article 87 of this Law but not later than within five working days from the date of receipt of an appropriate statement by the taxpayer. If the amounts recovered without due grounds are not refunded on time, interest shall be calculated for the benefit of the taxpayer in accordance with the procedure laid down in Article 87 of this Law, unless a specific tax law provides otherwise. Article
371. Cessation of the Right to Enforce the Recovery of Arrears in Payments The tax administrator’s right to enforce the recovery of arrears in payments shall cease where: 1) the tax obligation ceases; 2) the period of limitation for the enforced recovery of arrears in payments expires. Article
372. Bad Arrears
373. Unless a specific tax law provides otherwise, the taxpayer’s arrears in payments shall be acknowledged as bad where it is impossible to recover such arrears due to objective reasons or where it is unfeasible in social and economic terms to enforce their recovery for the following reasons: 1) no property of the taxpayer is identified or the property identified is non-liquid (of small liquidity); 2) enforcement expenses exceed the arrears in payments; 3) it is unfeasible to enforce the recovery of arrears due to difficulties in the economic (social) position of a natural person: the natural person needs state support (he has reached retirement age, he is disabled, he requires medical treatment, preventive medical care and rehabilitation, he is unemployed, he received social benefits) or such support is already provided to him. Such grounds for the acknowledgement of arrears as bad shall be applied to only those taxpayers who are natural persons or where there are difficulties in the economic (social) position of the owners of individual (personal) enterprises or members of partnerships; 4) the period of limitation for the enforced recovery of arrears in payments has expired.
374. The arrears acknowledged as bad on the grounds specified in subparagraphs 1-3 of paragraph 1 of this Article shall not be treated on a priority basis in respect of enforced recovery and shall not be taken into account for the purpose of planning the budget revenue. Where established that it is possible and feasible to enforce the recovery of the aforementioned arrears, such recovery shall be enforced.
375. The arrears acknowledged as bad on the grounds specified in subparagraph 4 of paragraph 1 of this Article shall be written off from the budget revenue accounts.
376. The procedure for the acknowledgement of arrears as bad, the procedure for the auditing and accounting of bad arrears and the methods of calculating the expenses relating to the enforced recovery of arrears in payments shall be established by the central tax administrator, after coordination with the Minister of Finance. CHAPTER VI TAX INSPECTION Article
377. Right of the Tax Administrator to Select Taxpayers for Inspection The tax administrator shall be independent in its selection of taxpayers for inspection and shall establish the scope and time of the inspection thereof. Article
378. Types of Tax Inspection The types of tax inspection shall be as follows: 1) comprehensive inspection, i.e. the inspection of the discharge of tax obligations which includes the verification of correct calculation, declaration and payment of all taxes paid by the taxpayer over a certain period of time; 2) topical inspection, i.e. the inspection of the discharge of tax obligations which includes the verification of correct calculation, declaration and payment of a specific tax (taxes) paid by the taxpayer and administered by the relevant tax administrator over a certain perio