SIGNIFICANT AMENDMENTS TO THE LAW ON TAX ADMINISTRATION

Since 1st January 2013, the following substantive amendments to the Law on Tax Administration will come into effect:

• In order to reduce the tax payers administrative burden, the tax authorities have the right to exempt them from the statutory requirements, if implementation of the tax liabilities can be ensured by other equivalent alternative means (e.g. if there is possibility to check whether the person has paid the state charges by other means, release him from the obligation to furnish a receipt confirming a payment).

• Permanent Lithuanian residents once per calendar year will have to inform the tax authorities on the transactions meeting all the below listed criteria:

1) The funds (including borrowings) under the transactions will be received from the natural persons or foreign legal entities;

2) The amount paid in cash in one transaction or a number of transactions with the same individual within the same calendar year exceeding 50,000 LTL;

3) Transactions will be in a form other than confirmed by the notary public;

4) A person shall receive income under the transactions that are not declared to the tax authorities under the requirements of other tax laws.

If the resident shall not submit the above information, he will not be able to justify acquisition of assets and his revenue sources received under these transactions. Late submission or presentation of corrected information will be ignored if the competent public authorities have already started tax investigation or violation trial under the Administrative Offences Code or under the Criminal Code.

• The requirement that in all cases where the taxpayer is applying for a deferral of tax, to provide documentation supporting that he has a factual opportunity to settle within the requested period, was annulled.

• On the same grounds on which the taxpayer may be relieved from the payment of interest, the taxpayer may be relieved for the calculated (estimated), but unpaid (recoverable) interest, increased interest, penalty on interest, or part thereof under the tax credit.

• To ensure the prevention of failure to declare taxes, the tax authorities have a right to establish the tax liability onto the taxpayer under the tax return of the last preceding fiscal period. This does not preclude the taxpayer’s to pay tax and file tax return in accordance with the laws.

• The tax authorities shall be entitled to instruct the taxpayer temporarily (up to one year) to settle with the legal entities and individuals engaged in commercial activities (to pay or receive money), only in non-cash form.

• In order to encourage taxpayers to perform their tax obligations on time, shortening the period of settlement, advancing the tax authorities’ right to recover tax debt:

– The right to recover the tax debt shall be acquired on the day following the expiry of the prompt payment of tax set in the tax authorities’ notice;

– If the tax payer presenting his tax return later or revised upon the end of period for payment of tax, the tax authorities shall be entitled to recover the tax set in the revised tax return and related interest on the day following the date of the submission of the tax return.