Article 48

Article 48 Official translation REPUBLIC OF LITHUANIA LAW ON VALUE ADDED TAX 5 March 2002 No IX-751 Vilnius (As last amended on 12 January 2006 No. X-487) CHAPTER I GENERAL PROVISIONS Article

1. Scope of the Law
2. This Law establishes the imposition of the value added tax (hereafter VAT) and the obligations of taxable persons, VAT payers and other persons incidental to the payment of the tax.
3. The provisions of this Law have been harmonised with the EU legal acts specified in Annex 2 to this Law. Article
4. Definitions
5. "Goods subject to excise duty" shall mean ethyl alcohol and alcoholic beverages, manufactured tobacco, energy products (except coal, coke and lignite) as defined in the Law of the Republic of Lithuania on Excise Duty.
6. "Taxable person" shall mean any taxable person of the Republic of Lithuania or a foreign state.
7. "Consideration" shall mean everything which has been or is to be obtained in money or in any other form as payment for the supply of goods and services from the purchasers/customers and/or third party.
8. "Disclosed agent" shall mean a taxable person acting as an intermediary in the transaction for the supply of goods or services in the name and for the account of another person.
9. "Employment" shall mean work carried out under the employment contract, also any other activity performed on the basis of legal ties creating the relationship of employer and employee (by agreement as regards remuneration for work , workplace and functions, work discipline, etc), corresponding to those created under the employment contract.
10. "Economic activities" shall mean activities (including all activities of producers, traders and persons supplying services, agricultural activities, fishing activities, mining, activities of the professions, exploitation of property and/or property rights) seeking to obtain any income (regardless of whether or not the activity is aimed at making a profit). The following activities, however, shall not be considered as economic activities: 1) employment as it is defined in paragraph 5 of this Article; 2) activities of state and local government authorities as they are defined in paragraph 39 of this Article, even where they collect dues, fees or payments in connection with these activities;
11. "Electronic means" shall mean electronic equipment intended for data processing (including digital compression) and storage of data, employing wires, radio transmission, optical technology or other electromagnetic means.
12. "Territory of the European Communities" shall mean the territory in which the provisions of the Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the member states relating to turnover taxes - common system of value added tax: uniform basis of assessment (hereafter - Directive 77/388/EEC) shall be applicable.
13. "Capital assets" shall mean tangible property and other objects of the right of ownership which are used in the economic activities of the taxable person for a period exceeding one year (according to the groups of capital assets listed in Annex 1 to the Law on Profit Tax).
14. "Importer" shall mean a person who is liable to pay the set customs debt on importation for the imported goods in the territory of the country or would be liable to pay customs debt on importation if import duties, agricultural or other charges were levied on the imported goods.
15. "Derivative " shall mean a financial instrument (future contract, forward contract, etc.) the value or price whereof is linked to the value or price of the goods on which the instrument is based as well as a financial instrument (future contract, forward contract, etc.) the value or price whereof is linked to the price of securities, exchange rate, interest rate, stock exchange index, determination of creditworthiness or any other variable.
16. "Movable" shall mean any property except for that referred to in paragraph 18 of this Article.
17. "Controlling person" shall mean any person controlling the taxable person if he: 1) directly or indirectly holds over 50% of shares (interests, member shares) in the taxable person or other rights to distributable profit or pre-emptive rights to the acquisition thereof, or 2) himself being the holder of not less than 10% of shares (interests, member shares) in the taxable person or other rights to a share of distributable profit or pre-emptive rights to the acquisition thereof, holds over 50% thereof together with the related persons, or 3) has the right to elect/appoint the majority of members of the managing body of the taxable person and/or actually is in control of the decisions made by the taxable person.
18. "Reduced rate of the VAT" shall mean the rate of VAT fixed in this Law below the standard rate, except for the zero-rate.
19. "Taxable person of the Republic of Lithuania" shall mean a legal or natural person of the Republic of Lithuania who/which carries out economic activities of any type.
20. "New means of transport" shall means the means of transport referred to in Article 35 of this Law, which fulfil at least one of the following conditions: 1) the motorised land vehicle was supplied no more than 6 months, the vessel and the aircraft - no more than 3 months after the date of first entry into service (according to the criteria for determining the first entry into service approved by the Government of the Republic of Lithuania or an institution authorised by it. 2) the motorised land vehicle has travelled more than 6 000 kilometres, the vessel has sailed for more than 100 hours, or the aircraft has flown for more than 40 hours.
21. "Undisclosed agent" shall mean a taxable person acting as an intermediary in the transaction for the supply of goods or services in his own name but for the account of another person.
22. "Property immovable by nature" shall mean property which is immovable by nature, i.e., land or other property, that cannot be removed from one place to another without the change of its purpose and a material reduction of its value.
23. "Place where the person has his permanent address or usually resides" shall mean the country where he usually resides or, in the absence of such place, the country where he has a place of personal, social and economic interests.
24. "Subdivision" shall mean an established place through which a taxable person of one state is engaged in economic activities in another state.
25. "Material improvement of the building/structure" shall mean construction works which extends the useful life of the building or structure or improves its useful properties.
26. "Non-profit-making legal persons" shall mean legal persons established for other than profit-making purposes, whose generated profit under the legal acts regulating their activities shall not be distributable to their founders and/or members. In the cases when profit generating activity constitutes a substantial part of activities of the person conforming to the definition of the non-profit making person, for the purposes of this Law such a person shall not be considered as non-profit making person, even though profit-making is not the purpose of the person's activities.
27. "A good" shall mean any thing (including notes and coins of numismatic interest), also electricity, gas, heat and other types of energy. A computer medium the contents whereof is comprised of nonstandardised software shall not be treated as a good. Nonstandardised software shall be the software that has not been developed for mass consumption to be used by the consumers independently following its introduction and limited training necessary in order to perform standardised operations or functions.
28. "Importation of goods" shall mean: 1) the entry into the territory of the European Communities of non-Community goods or the actions which brought about the entry thereof; 2) the entry into the territory of the European Communities of Community goods from third territories or the actions which brought about the entry thereof.
29. "Transport of cargo" shall mean transport of tangible property (mail including) by all forms of transport, also transport of goods by stationary transport installations (pipelines, electricity lines, etc.).
30. "Intra-Community transport of goods" shall mean transport where the place of departure and the place of arrival are situated within the territories of different Member States. The transport of goods where the place of departure and the place of arrival are situated within the territory of the country shall be treated as intra-Community transport of goods where the place of departure and the place of arrival are situated within the territories of two different Member States.
31. "VAT deduction" shall mean the proportion of input and/or import VAT, deductible under the provisions of this Law.
32. "VAT payer" shall mean a taxable person identified for purposes of value added tax by the tax administrator, including any other identification for value added tax purposes, provided the person has been issued with an appropriate identification number, except for the identification of persons for flat-rate VAT scheme purposes.
33. "VAT invoice" shall mean a document serving as an invoice in respect of goods or services supplied and in respect of advance payments made, which meets all requirements prescribed by this Law for such a document for it to serve as an invoice. Where such a document is issued after the arising of an obligation to issue in any other Member State, it shall be treated as the VAT invoice, provided that it meets the conditions imposed by that Member State on the issue of VAT invoice in such instance.
34. "Open market value" shall mean the amount of consideration which a purchaser would have to pay for the goods or services to a supplier thereof at arm's length where each one of them is seeking maximum economic benefit for himself.
35. "Related persons" shall mean: 1) a natural person and his spouse, fiancé or cohabitant; 2) a natural person and persons connected to him by blood relationship (up to the fourth degree) or by marriage (a natural person and the relatives of his spouse (up to the fourth degree), also natural person and the relatives (up to the second degree) of the relatives of his spouse (up to the second degree); 3) a natural person and the person connected to him by guardianship relations; 4) a taxable person and a person who holds an interest in the latter (shareholder, holder of member share, etc.); 5) a taxable person and a member of its management body; 6) a taxable person and its employees; 7) a taxable person and a natural person who is related to the person holding an interest in the taxable entity or is a member of the taxable entity's management body by the links or relationship specified in subparagraphs 1, 2 or 3 of this paragraph; 8) taxable persons that are subsidiaries of the same taxable parent entity; 9) a taxable parent entity and a person holding an interest in its taxable subsidiary; 10) a taxable subsidiary and a person holding an interest in its taxable parent entity; 11) a taxable parent entity and a member of the management body of its taxable subsidiary; 12) a taxable subsidiary and a member of the management body of the taxable parent entity; 13) a taxable parent entity and a natural person connected to a person holding an interest in its taxable subsidiary or to a member of the management body of its taxable subsidiary company by the links or relationship specified in subparagraphs 1, 2 or 3 of this paragraph; 14) a taxable subsidiary and a natural person connected to a person holding an interest in its taxable parent entity or to a member of its management body by the links or relationship specified in subparagraphs 1, 2 or 3 of this paragraph; 15) two taxable persons if one of them directly or indirectly (through one or several intermediaries) controls over 25% of shares (interest, member shares) or has a right to over 25% of decisive votes in the other person or has undertaken to co-ordinate his business decisions with that other person or has assumed liability for the performance of obligations of that other person to third persons or has undertaken to transfer to that other person all or part of the profit or has granted that other person the right to use over 25% of its assets; 16) two taxable persons if the same persons holding an interest in them (alone or together with persons connected with them by the links or relationship specified in subparagraphs 1, 2 or 3 of this paragraph) directly or indirectly hold over 25% of shares (interest, member shares) in each one of them; 17) two taxable persons if one of them has the right to elect (appoint) the majority of members of that other person's management bodies and/or actually controls the decision making of that other person.
36. "Standard rate of VAT" shall be 18 %.
37. "Territory of the country" shall mean the territory of the Republic of Lithuania and the area adjacent to the territorial waters of the Republic of Lithuania where, under the laws of the Republic of Lithuania and international law, the Republic of Lithuania has the right to carry out exploration and to exploit the sea-bed and underground natural resources.
38. "Telecommunication services" shall be deemed to be services relating to the transmission, emission or reception of signals, writing, images or sound or information of any nature by wire, radio, optical or other electromagnetic systems, including the related transfer or assignment of the right to use capacity for such transmission, emission or reception as well as provision of access to global information networks.
39. "Means of transport" shall mean means of transport intended for the transport of persons or goods provided that at least one of the following conditions is fulfilled: 1) motorised land vehicles the capacity of which exceeds 48 cubic centimetres or the power of which exceeds 7.2 kilowatts; 2) vessels exceeding 7.5 metres in length, except for the vessels used for navigation on the high seas and for carrying passengers and/or cargo on international routes and/or the provision of other services for reward, also fishing vessels and vessels used for rescue and assistance at sea; 3) aircraft the take-off weight of which exceeds 1550 kilograms which are used for carrying passengers and cargo or for the provision of other services for reward by means of air transport on international routes.
40. "Third territories" shall mean the territories specified in the list approved by the Minister of Finance based on the Directive 77/388/EEC, excluded from the area of application of the provisions of the Directive.
41. "Third country" shall mean any territory other than the territory of the European Communities or a third territory as these are defined in paragraphs 8 and 36 of this Article.
42. "Foreign taxable person" shall mean any of the following persons engaged in any form of economic activity: 1) a legal person or organisation of a foreign state, having its seat in a foreign state and incorporated or otherwise organised in accordance with the legal acts of the foreign state, or 2) any other entity incorporated, established or otherwise organised abroad, or 3) a natural person who has a permanent address or usually resides outside the Republic of Lithuania.
43. "Activities of the state and municipalities" shall mean the activities of the state, municipalities, state or municipal institutions and offices and, in the cases specified by laws, also the activities of other public legal persons, which the said persons are obligated under laws to engage in. For the purposes of this Law the following activities engaged in by the said persons shall not be considered as state and municipality functions, provided they are not carried out on such a small scale as to be negligible: 1) supply of new goods (except for the supply of seized, ownerless goods (or goods recognised as ownerless property), or goods acquired by inheritance by the state or goods or treasure taken or transferred to state income), which are or may be in competition with goods supplied by taxable persons; 2) supply of electricity, gas, heat and other forms of energy, supply of water, steam; 3) supply of transport services, placing in a warehouse, also provision of port (sea, etc.) services and granting of the right to use airports; 4) supply of services of trade fair and business exhibition organisation; 5) supply of advertising, market survey and/or public opinion polling and other similar services; 6) supply of travel and tourist agency services; 7) supply of telecommunication services; 8) supply of public information services; 9) supply of catering services; 10) activities of agricultural market economic regulation agencies; 11) lease; 12) any activities carried out by the above persons, that are not specified in paragraphs 1-11, if the goods and/or services supplied thereby by the said persons are or may be in competition with goods and/or services supplied by the taxable persons.
44. A Member State (or territory of a Member State) shall mean the territory of a European Union Member State except for the third territories. The territory of a Member State shall also mean the territories transactions concluded in which or intended for which, based on the provisions of Directive 77/388/EEC, shall be treated as transaction originating in that Member State or intended for that Member State.
45. Other concepts shall be used in this Law within the meaning defined in the Law of the Republic of Lithuania on Tax Administration (hereafter - the Law on Tax Administration), the Customs Code of the European Communities (hereafter - the Customs Code), as well as the Civil Code of the Republic of Lithuania (hereafter - the Civil Code) to the extent it is in conformity with this Law (with the exception of the cases authoritative under the Civil Code), however, for the purposes of this Law, only the State Tax Inspectorate shall be treated as tax administrator. Article
46. Scope of VAT
47. The supply of goods or services shall be subject to VAT provided the following conditions are satisfied: 1) the supply of goods and/or services is effected for consideration; 2) the supply of goods and/or services according to the provisions of this Law is considered to be effected within the territory of the country; 3) the goods and/or services are supplied by a taxable person in the performance of his/its economic activities, i.e. acting as such. A natural person shall not be considered a taxable person in respect of the supply of goods and/or services if the transactions concluded by the natural person are not related to the economic activities carried out by him. The condition specified above shall not apply with respect to supplies for consideration of new means of transport dispatched or transported by the supplier, purchaser or the third party on behalf of any one of them out of the territory of the country but within the European Community.
48. The following acquisitions of goods for consideration within the territory of the country from another Member State shall be subject to value added tax: 1) acquisitions of goods from a taxable person in the performance of his/its economic activities, i.e. acting as such, with respect to whom the provisions of Article 24 of Directive 77/388/EEC are not applicable, by a taxable person who concluded the transaction in the performance of his/its economic activities, i.e. acting as such, or a legal person who is not a taxable person, provided that the supply of goods is not treated as having been effected within the territory of the country in the meaning of Article 12 (2 or 3) of this Law; 2) acquisitions of new means of transport effected by any person; 3) acquisition of goods for which excise duties become chargeable under the Law of the Republic of Lithuania on Excise Duties by any person except for a natural person who is not a taxable person.
49. The scope of import VAT shall be importation of goods where under the provisions of this Law the goods are treated as imported within the territory of the country.
50. In addition to the supply of goods (supply of services) indicated in paragraph 1, acquisitions of goods specified in paragraph 2 and importation of goods referred to in paragraph 3 of this Article, the emergence of the circumstances indicated in Article 53 of this Law shall also be subject to value added tax.
51. In derogation of subparagraph 1 of paragraph 2 of this Article, the following shall not be treated as acquisition of goods subject to value added tax; 1) acquisitions of goods from any other Member State where zero-rated VAT would be applied under Articles 43, 44 or 47 of this Law to such supply of goods if effected within the territory of the country; 2) acquisitions from any other Member State of second-hand goods, works of art, collector's items or antiques, within the meaning of this Law, where the vendor is a taxable dealer who is engaged in the supply of goods or where the vendor is an organised of public sales by public auctions and the goods acquired have been subject to tax in the Member State of departure of the dispatch or transport in accordance with the provisions comparable to the provisions of Section Three of Chapter XII of this Law; 3) acquisition of means of transport from any other Member State where the vendor is a taxable person engaged in the supply of the goods and the supplies of goods acquired have been subject to tax in the Member State of departure of the dispatch in accordance with the special arrangements applied in the Member State with respect to second-hand means of transport. Article
52. Supply of Goods
53. Supply of goods shall mean the transfer of goods to another person where under the conditions of the transaction this person or a third party is transferred the right to dispose of the goods as their owner.
54. The actual handing over of goods, pursuant to a contract of lease or any other contract for the transfer of goods providing for payment on deferred terms or by instalments shall also constitute supply of goods for the purposes of this Law, if under the terms of the transaction the major portion of risk and benefit relating to ownership of goods as well as ownership shall pass to the person to whom the goods have been handed or to the third party upon payment of the final instalment.
55. For the purposes of this Law, the establishment or transfer of the rights in rem over the property immovable by its nature (easement, usufruct, right of development, long-term lease) shall also be considered as supply of goods (of the property immovable by its nature in respect whereof they have been established). The transfer of interest or a share, where the transfer of the interest or share gives the holder thereof the right to dispose of the property immovable by its nature (or part thereof) as its owner shall also be considered supply of goods (property immovable by its nature) within the meaning of this Law. The provisions of this paragraph shall be applied only where the amount of consideration for determining or transferring the rights in rem, passing of a member share or security corresponds to the open market value of the property immovable by its nature. Article
56. Intra-Community Acquisition of Goods
57. Intra-Community acquisition of goods for consideration shall mean acquisition, according to the terms and conditions of the transaction, of the right to dispose as owner of the goods dispatched or transported by the supplier, purchaser or a third party on behalf of any one of them to a Member State other than that from which the goods are dispatched or transported.
58. Where a non-taxable legal person acquires goods that are dispatched or transported from a third territory or third county and imports those goods into a Member State other than the Member State of arrival of the goods dispatched or transported, the legal person shall be deemed to have acquired the goods from the Member State of import.
59. The transfer by a taxable person or any other person on his behalf of goods from his undertaking to another Member State for business purposes shall also be treated as intra-community acquisition of goods for consideration, unless the importation is effected according to the terms and conditions of paragraph 2 of Article 51 of this Law.
60. The appropriation of goods by the forces of the states parties to the North Atlantic Treaty, for their use or for the use of the civilian staff accompanying them, which they have not acquired subject to the general rules governing taxation on the domestic market of the Member State, where the importation of these goods could not benefit from the exemption from import VAT under paragraph 3 of Article 40 of this Law, shall also be deemed to be an intra-Community acquisition of goods.
61. For the purposes of this Law, the dispatch or transport of goods under a contract, which would also constitute supply of goods within the meaning of paragraph 2 of Article 4 of this Law, shall be deemed to be intra-Community acquisition of goods for consideration. Article
62. Private Use of Goods by a VAT Payer
63. For the purposes of this Law private use of goods by a VAT payer, as it is defined in paragraph 2 of this Article, shall also constitute supply of goods for consideration.
64. Unless otherwise provided by this Article, private use of goods by VAT payer shall be considered to have occurred where goods at the disposal of the VAT payer, input and/or import VAT on which (if the goods are manufactured by the VAT payer itself/himself - on other goods and/or services used for the manufacture of the said goods) was wholly or partly deductible by the VAT payer, are subsequently : 1) transferred free of charge, whereas the person to whom the goods are transferred or the third party acquires the right to dispose of the goods as their owner, or 2) used in any other manner where input and /or import VAT on goods and/or services intended for the above use would not be deductible by the VAT payer under this Law.
65. In derogation from provisions of paragraph 2 of this Article, the transfer or use of goods shall not be treated as private use of goods by the VAT payer, where the goods are transferred or used as samples, i.e. goods forming part of the VAT payer's regular business are transferred or used for examination, analysis or test. In this case goods may be transferred or used in the amount required in order to ensure the quality of the examination, analysis or test, having regard to the nature of the goods and character of the examination, analysis or test, as well as pursuant to relevant provisions of the legal acts regulating the above (provided it is regulated by legal acts).
66. In derogation from provisions of paragraph 2 of this Article, the transfer or use of goods shall not be treated as private use of goods by the VAT payer, where the goods are transferred or used for the making of gifts of small value (for advertising, representation, charity and/or support purposes). The Government of the Republic of Lithuania or an institution authorised by it shall establish the conditions and limitations of the application of the provisions of this paragraph, including the limitations relating to the value of goods transferred or used for the purposes specified herein.
67. In derogation from provisions of paragraph 2 of this Article, the loss of goods shall not be treated as their private use by the VAT payer.
68. Where a natural person who is a VAT payer attributes part of the acquired tangible capital assets to his/her economic activities pursuant to the provisions of this Law, the provisions of this Article shall apply only to the part of the assets attributed in the said manner. The provisions of this Article shall not be applicable to any transfer or use of the remaining part of the assets regardless of the fact that input and/or import VAT on the property became partly deductible. Article 51 . Intra-Community Transport of Goods
69. Supplies of goods effected for consideration shall be the transfer by the taxable person of goods from his undertaking from the Member State where the place of departure of goods is situated to another Member State if the goods are transferred by the taxable person himself or by another person on his behalf.
70. In derogation of provisions of paragraph 1 of this Article, the following shall not be treated as supply of goods: 1) the transfer of goods to another Member State where the supply of the goods will be effected (which will be subject in the Member State to the provisions equivalent in essence to those of paragraph 3 of Article 12 of this Law); 2) the transfer of goods to another Member State where the goods will be installed or assembled and where supply of the goods will take place (which in that Member State will be subject to the provisions equivalent in essence to those of paragraph 2 of Article 12 of this Law); 3) the transfer of goods intended for the purposes of supplies effected on board vessels, aircraft and/or on trains during intra-Community passenger transport and where the supply of the goods will take place in another Member State (which in that Member State will be subject to the provisions equivalent in essence to those of Article 121 of this Law); 4) the transfer of goods to another Member State when the goods are transferred for the purpose of supply on which zero-rated VAT is charged subject to the provisions of Chapter VI of this Law (with the exception of Article 53); 5) the transfer of goods to another Member State for the purpose of work on the goods (repair, maintenance, adaptation, etc.), processing and/or alteration provided that the goods, after being worked upon, are re-dispatched to that taxable person in the Member State from which they had initially been dispatched or transported; 6) the transfer of goods to another Member State for the purpose of temporary use of the goods in question for the supply of services by the taxable person established within the Member State and therefore the goods are temporarily transferred (i.e. until they are needed in another Member State for the provisions of the services in question); 7) temporary transfer of goods for a period not exceeding 24 months to another Member State in which the import of the same goods from a third country with a view to temporary use would be eligible for the arrangements for temporary importation with full exemption from import duties; 8) transmission of natural gas and electricity via natural gas and electricity supply systems to another Member State (to which provisions equivalent in essence to those laid down in paragraph 6 of Article 12 of this Law will be applied in the other Member State).
71. Where the conditions specified in paragraph 2 of this Article are no longer satisfied, the transfer of goods to another Member State shall be considered as the supply of goods for consideration as indicated in paragraph 1 of this Article. The supply of goods shall be deemed effected if the above conditions are satisfied. Article
72. Manufacture of Tangible Capital Assets by a VAT Payer himself
73. For the purposes of this Law, supply of goods for consideration shall include manufacture of tangible capital assets by a VAT payer himself. In this Law, manufacture of tangible capital assets by the VAT payer himself shall mean the entirety of operations of processing of acquired and/or imported raw materials and materials, manufacturing and other operations performed by the VAT payer himself and/or services acquired by the VAT payer, the result whereof is a new unit of tangible capital assets. Material improvement of the building/structure used in the economic activities of the VAT payer shall also be treated as manufacture of tangible capital assets by the VAT payer himself, regardless of whether or not the VAT payer is the owner of the building/structure or uses it on other grounds, unless otherwise provided in Article 9 of this Law, and regardless of whether the VAT payer made improvements in the building/structure by himself or by acquiring services from other taxable persons.
74. The provisions of this Article shall be applied only in the cases where the input and/or import VAT on the goods and/or services used for such manufacture of tangible capital assets was wholly or partly deductible by the VAT payer. Article
75. Supply of Services Unless otherwise established in this Law, supply of services shall mean any transaction in respect of any civil rights object, provided this transaction is not treated as supply of goods within the meaning of this Law. Such transactions shall include, inter alia: 1) sale or other transfer of non-standardised software; 2) lease; 3) assignment of intangible property and title, except for the cases provided in paragraph 3 of Article 4 of this Law; 4) construction works, including the handing over of a constructed new building or structure to the client/contractor; 5) obligation to refrain from an act or to tolerate an act or situation. Article
76. Supply of Services for Private Use of a VAT Payer
77. For the purposes of this Law, supply of services for consideration shall also constitute supply of services for private use of a VAT payer, as it is defined in paragraph 2 of this Article.
78. The following shall be treated as supply of services for private use of a VAT payer: 1) giving another person the right to use for a certain time free of charge the object of the right of ownership of the VAT payer. The above provision shall apply only where input and/or import VAT on the object of the right of ownership (where it is manufactured by the VAT payer himself - on the goods and/or services used for the manufacture thereof) was wholly or partly deductible by the VAT payer, or 2) the object of the VAT payer's right of ownership which is not considered as a good within the meaning of this Law, is transferred or used in the ways specified in paragraph 2 of Article 5 of this Law. The provision shall be applicable only where input and/or import VAT on the object of the right of ownership (where it is manufactured by the VAT payer himself - on the goods and/or services used for the manufacture thereof) was wholly or partly deductible by the VAT payer. 3) the services have been rendered free of charge and not in relation to the VAT payer's economic activities.
79. Where a natural person who is a VAT payer attributes part of the acquired tangible capital assets to his/her economic activities pursuant to the provisions of this Law, the provisions of this Article shall apply only to the portion of the assets attributed in the said manner. The provisions of this Article shall not be applicable with respect to the use of any other part of the assets regardless of the fact that the input and/or import VAT on the assets became partly deductible. Article
80. Special Rules Applied in respect of Certain Transactions
81. If a natural person who has carried out economic activities in accordance with the procedure laid down by legal acts without having established an undertaking (registered a farmer's farm, etc.), later transfers the activities as a complex (i.e. the entirety of the objects of the right of ownership, acquired and used for the activities, also other property and non-property rights, debts and other obligations related to the said activities) to another taxable person who continues the activities that are transferred to him/it, for the purposes of this Law such transfer of activities shall not be considered as supplies of either goods or services.
82. Any transfer of an object of the right of ownership, where it is transferred as a property contribution to a company and the input and/or import VAT on the object of the ownership right (and in case of manufacture thereof by the VAT payer himself - on the goods and/or services used for the manufacture) was wholly or partly deductible by the VAT payer, shall be treated for the purposes of this Law as supply of goods for consideration (in case of transfer of an object considered as a good within the meaning of this Law) or as supply of services for consideration (where the transferred object is not treated as a good for the purposes of this Law).
83. Transfer of any object of the right of ownership due to the winding up of the legal person-VAT payer by way of reorganisation, where input and/or import VAT on the object of the ownership right (and in case of manufacture thereof by the VAT payer himself - on the goods and/or services used for the manufacture) was wholly or partly deductible by the VAT payer being wound up shall be treated for the purposes of this Law as supply of goods for consideration ((in case of transfer of an object considered as a good within the meaning of this Law) or as supply of services for consideration (where the transferred object is not treated as a good for the purposes of this Law)).
84. Return to the owner of a building/structure materially improved by the VAT payer who/which used it on the grounds other than the right of ownership prior to the expiry of the period of adjustment of VAT deductions fixed in this Law shall be treated as supply of goods for consideration provided that the input and /or import VAT on goods and/or services used for the improvement was wholly or partly deductible by the VAT payer. The parties shall have the right to make an agreement that material improvement of the building/structure shall be considered to be supplied to the owner of the building/structure not at the moment of return thereof, but right after the completion of the improvement works and in such case the provisions of this Law related to the manufacture of tangible capital assets by the taxable person himself shall not be applied to the VAT payer who carried out the improvement with respect to this building/structure. Article
85. Barter Where consideration for the supplied goods and/or services is given (wholly or in part) in goods and/or services, each party to the transaction shall be considered as supplying goods and/or services. Article
86. Agency
87. For the purposes of this Law, a disclosed agent shall be considered as supplying the service of agency (agent's service) to the person in whose name and for whose account he is taking part in the transaction.
88. Where an undisclosed agent takes part in the transaction, it shall be considered that the goods or services were at first supplied to the undisclosed agent and later by the undisclosed agent, even in the case where the same goods or services are in fact supplied directly to the final purchaser/customer. Article
89. Criteria for Determination of the Place of Supply of Goods (except for the Goods Supplied on Board Ships, Aircraft or Trains during the Transport of Passengers Effected in the Community)
90. If the supplied goods have to be transported, the place of supply of goods shall be deemed to be the place where the goods are at the time when transport of the goods begins regardless of who is transporting the goods (supplier, purchaser of the goods or, on behalf of any one of them, the third party). In the cases where the supplied goods were dispatched from a third territory or third country, the supply of goods, when the goods are supplied by the importer, and any subsequent supply shall be deemed to have been effected within the territory of the country, provided that the goods were imported in the Republic of Lithuania. The provisions of this paragraph shall not be applicable and the supply of goods shall not be regarded as having taken place in the territory of the country if the goods are dispatched or transported to another Member State where the supply of goods will be considered to have been effected because of the relevant requirements of legal acts of the Member State or in view of the right granted to the supplier of the goods in the application of the provisions, equivalent in essence to the provisions of paragraph 3 of this Article. The supplier of goods (if under the provisions of this paragraph the place of supply of his goods supplied and transported to another Member State according to the conditions laid down in paragraph 3 of this Article would be within the territory of the country) who himself wishes to consider another Member State as the place of supply of the goods supplied by him must apply to the local tax administrator in the manner prescribed by the central tax administrator with a request to grant him such right. The granted right may not be relinquished earlier than upon the lapse of 24 months after the granting thereof.
91. Where the goods supplied (regardless of who is transporting them) have to assembled or installed, with or without trial run, by or on behalf of the supplier, the place of the supply shall be deemed to be the territory of the country where the goods are installed or assembled.
92. The supply of goods shall also be deemed to have been effected in the territory of the country where the following conditions are fulfilled: 1) the goods are transported by the supplier or any other person on his behalf from any other Member State into the territory of the country (i.e. transport ends in the territory of the country). Where the transport of the supplied goods dispatched into the territory of the country started in a third territory or third state and the supplier thereof imported them in another Member State, the goods shall be deemed dispatched from that other Member State; 2) the purchaser of goods is one of the persons indicated in subparagraph 1 of paragraph 1 of Article 711 of this Law or a natural person who is not a taxable person; 3) the supply is of goods other than new means of transport and other than goods supplied after assembly or installation.
93. By way of derogation from paragraph 3 of this Article, the supply of goods indicated in paragraph 3 of this Article shall not be deemed to have been effected in the territory of the country where the following conditions are fulfilled: 1) the supply is of goods other than goods subject to excise duty; 2) the total value, less value added tax, of the supplies of goods other than products subject to excise duty effected by the supplier under the conditions laid down in paragraph 3 of this Law transported into the Republic of Lithuania in the current calendar year does not exceed LTL 125 000; 3) the total value, less value added tax, of the supplies of goods other than products subject to excise duty effected by the supplier under the conditions laid down in paragraph 3 of this Law transported into the Republic of Lithuania in the previous calendar year did not exceed LTL 125 000; 4) the supplier of the goods has not established his business in the Republic of Lithuania (i.e. he has his permanent address or usually resides (if he is a natural person) outside the Republic of Lithuania) or has not established a subdivision in the Republic of Lithuania; 5) the competent authority of the place of dispatch of the goods has not granted the supplier of the goods the right to apply the provisions of paragraph 3 of this Article.
94. The provisions of paragraph 3 of this Article shall not be applied to the supplies of second-hand goods, works of art, collector's items and antiques to which special tax arrangements laid down in Section Three of Chapter XII of this Law or arrangements equivalent to them in principle in another Member State are applicable as well as in the cases of supplies of means of transport to which special transitional provisions are applicable to second-hand means of transport in the Member State of departure of the dispatch or transport.
95. In derogation of other provisions of this Article, the supply of natural gas and electricity shall be deemed effected in the territory of the country only in the following cases: 1) when the goods are acquired by a taxable person established in the Republic of Lithuania (i.e. if its principal place of business (if it is not a natural person), subdivision (through which the above goods are acquired), or his permanent address or the place where he usually resides (if he is a natural person) is in the Republic of Lithuania), the main purpose for which it/he acquired natural gas and/or electricity is resale of the natural gas and/or electricity to other persons and if the consumption of the said goods for its/his own needs is negligible; 2) when the goods are acquired by a person not indicated in subparagraph 1 of this paragraph - if the actual consumption of the said goods is effected in the Republic of Lithuania or, in case the said goods are not actually consumed, the registered office of the purchaser (if the purchaser is not a natural person), the subdivision (through which the said goods are acquired) or the place where the purchaser (if he is a natural person) has his permanent address or usually resides is in the Republic of Lithuania.
96. If the case of goods not dispatched or transported, the supply of goods shall be deemed to have been effected in the territory of the country in case the goods were in the territory of the country when the supply of the goods took place. Article
97. The Place of Supply of Goods on Board Ships, Aircraft or Trains during the Transport of Passengers Effected in the Community
98. In the case of goods supplied on board ships, aircraft or trains during the transport of passengers effected in the Community the place of supply of goods shall be deemed to be effected in the territory of the country if the part of transport or the point of the departure of the transport of passengers is within the territory of the country.
99. For the purposes of this Article: 1) ships, aircraft or trains shall be considered as providing transport of passengers within the Community if the transport or a part thereof is effected within the Community; 2) a transport of passengers or a part thereof shall be considered as effected in the Community if the point of departure and the point of arrival of the transport of passengers or a part thereof is within the Community; 3) the point of departure of the transport of passengers or of a part thereof shall mean the first point of passenger embarkation foreseen within the Community (where relevant after a leg outside the Community); 4) the point of arrival of the transport of passengers or of a part thereof shall mean the last point of disembarkation foreseen within the Community of passengers who embarked in the Community (where relevant before a leg outside the Community).
100. In the case of a return trip on board the ship, aircraft or by train, for the purpose of this Law the return leg shall be considered to be a separate transport. Article 122 . The Place of the Intra-Community Acquisition of Goods
101. The intra-Community acquisition of goods shall be deemed to have been effected in the territory of the country when the dispatch or transport of the goods ended.
102. The intra-Community acquisition of goods shall also be deemed to have been effected within the territory of the country in the case when the person acquiring the goods is a VAT payer identified for purposes of value added tax in the Republic of Lithuania, his identification number is indicated when acquiring the goods and the goods are dispatched from one Member State to another, unless it is established that acquisition has been subject to tax in the Member State where the transport of the goods ended.
103. In derogation of provisions of paragraph 2 of this Article, when the goods dispatched from one Member State into another Member State are acquired by a VAT payer identified for purposes of value added tax in the Republic of Lithuania for the needs of a subsequent supply effected within that other Member State to a person for whom VAT is chargeable in that other Member State on the goods supplied, whereas the VAT payer from the Republic of Lithuania declares the transactions in the statement of inter-Community supply of goods according to the procedure laid down in this Law, the acquisition of goods from another Member State shall not be considered as having been effected within the territory of the country. Article
104. The Place of Import of Goods
105. The place of import of non-Community goods shall be the territory of the country within which the goods are when they enter the Community, except where on entry into the Community territory the non-Community goods are not in free circulation, but are produced to customs and, where applicable, placed in temporary storage, placed in a free zone or a free warehouse, or placed under customs warehousing arrangements or inward processing arrangements, or placed under the arrangements for temporary importation with total exemption from import duty or under external transit arrangements. In the latter cases the place of import of non-Community goods shall be the territory of the country only provided the goods are within the territory of the country when the above-mentioned procedures and arrangements cease to apply.
106. The place of import of non-Community goods shall also be the territory of the country in the cases where at the moment of their entry into the Community these goods are outside the territory of the country, however they are not in free circulation but are produced to customs and placed in temporary storage or placed in a free zone or a free warehouse or placed under customs warehousing arrangements or inward processing arrangements or under the arrangements for temporary importation with total exemption from import duty or under external transit arrangements and within whose territory these goods are when they cease to be covered by those arrangements or procedures.
107. The place of import of Community goods shall be the territory of the country if the goods are within the territory of the country at the moment of their entry into the Community, except where the goods are subject to the regime which, if these were non-Community goods, would allow to place them under customs warehousing arrangements for being placed in temporary storage, to place them in a free zone or a free warehouse for inward processing arrangements, or to place them under the arrangements for temporary importation with total exemption from import duty or under internal transit arrangements. In the latter cases the place of import of the Community goods referred to above shall be the territory of the country within which the goods cease to be covered by the said regime or internal transit arrangements under which they have been placed.
108. Similarly, the place of import of Community goods shall be the territory of the country when, on entry into the Community, the goods are outside the territory of the country but, on entry into the Community, they are placed under the arrangements which, if these were non-Community goods, would allow to place them under customs warehousing arrangements for placing them in temporary storage, to place them in a free zone or a free warehouse, to subject them to inward processing arrangements, or to place them under the arrangements for temporary importation with total exemption from import duty or under internal transit arrangements and within whose territory the goods cease to be covered by the regime under which they were placed or within which the goods cease to be covered by the internal transit arrangements. Article
109. The Place of Supply of Services (with the Exception of Transport Services)
110. Unless otherwise established in this Article or Article 131, the place where a service is supplied shall be deemed to be the territory of the country if the supplier has established his business within the territory of the county, i.e. the supplier of service has a fixed establishment (if it is not a natural person) or if he has his permanent address or usually resides (if he is a natural person) in the Republic of Lithuania, except where the service is performed through the subdivision in a foreign state. The place of the service shall also be within the territory of the country where the service is supplied by a foreign taxable person through its/his subdivision established within the territory of the country. The provisions of this paragraph shall not apply where the services specified in paragraph 6 of this Article are supplied by the supplier established within the territory of the country or the subdivision of a foreign taxable person established within the territory of the country to a taxable person established in another Member State or to any person established outside the Community.
111. Unless otherwise established in this Article or Article 131, the place where the services of agents who act in the name and for the account of another, when they procure for their principal goods or services or supply goods or services shall be situated within the territory of the country, where the principal transaction (i.e. supply of goods or services) has taken place under this Law within the territory of the country, except in cases where the services of agents are supplied to a VAT payer identified for purposes of value added tax in another Member State and he indicated the identification number when acquiring the services. Where the principal transaction under this Law has taken place in another Member State and the services of agents are supplied to a VAT payer identified for purposes of value added tax in the Republic of Lithuania while he indicated the identification number when acquiring the services, the place where the services are supplied shall be deemed to be the territory of the country.
112. In derogation from the provisions of paragraph 1 of this Article, the place of the supply of services connected with property immovable by its nature shall be the territory of the country only provided that the property with which the services are connected is situated or will be constructed within the territory of the country. For the purposes of this provision, services connected with the property immovable by its nature shall include: 1) construction, design and exploration works; 2) lease of property immovable by its nature; 3) services of agents in the hiring, sale and/or purchase of property immovable by its nature, services of valuation of the property, services of architects, engineers, services of supervision of the property immovable by its nature and other services connected with the property.
113. By way of derogation from the provisions of paragraph 1 above, the place of the supply of services relating to cultural, artistic, sporting, scientific, educational, entertainment or similar activities, including the activities of the organisers of such activities, and the supply of ancillary services necessary for the supply of the said services, where the services specified in this paragraph should not be considered as electronically supplied services, shall be deemed to be the territory of the country only provided that the services are physically carried out within the territory of the country.
114. By way of derogation from the provisions of paragraph 1 above, the place of the supply of the services of valuation of movable property, also work thereon (repair, maintenance, adjustment, etc.), processing and alteration shall be deemed to be the territory of the country if the services are physically carried out within the territory of the country, except in the cases where the person who purchases the services is a VAT payer identified for purposes of value added tax in another Member State and he indicated the identification number when purchasing the services, while upon the performance of the services, the property is dispatched or transported outside the territory of the country. When the services are physically carried out within another Member State, and the purchaser of the services has identified for purposes of value added tax in the Republic of Lithuania and indicated the identification number when acquiring the services, while upon the supply of the services the property is dispatched or transported from that other Member State where the services are physically carried out, the place of the supply of the services shall also be deemed to be the territory of the country.
115. The place of the supply of services listed in this paragraph shall be deemed to be supplied within the territory of the country if they are supplied by the supplier of the services established outside the territory of the country or the supplier of the services established within the territory of the country through the subdivision in a foreign state to taxable persons of the Republic of Lithuania (with the exception of cases where the services are supplied to the subdivisions of the persons located outside the territory of the country) or to foreign state taxable persons located within the territory of the country. The above provisions shall apply to: 1) transfers and assignments of copyrights and related rights, patents, industrial design, semiconductor topography, trade marks, firm names, secret processes and formulae, transfer of rights under the franchise agreement and other similar rights; 2) services of consultants, lawyers, auditors, accountants, engineers (not referred to in subparagraph 3 of paragraph 2 of this Article), technical control and analysis, market survey, public opinion polling and other similar services; 3) development, sale and other transfer of non-standardised software, data processing, transmission of information (where such services should not be considered as electronically supplied services; 4) insurance and financial services (with the exception of the hire of safes); 5) the supply of staff (with the exception of teaching and training of staff); 6) advertising services; 7) telecommunications services; 8) electronically supplied services (inter alia such as: website supply, web-hosting, distance maintenance of programmes and equipment, supply of software and updating thereof, making databases available, supply of music, films and games, supply of distance teaching, etc. If the supplier and the purchaser communicate by electronic means, but the good or the service is supplied not electronically, the communication shall not be considered as electronically supplied services); 9) radio and television broadcasting services; 10) the hiring out of movable tangible property, with the exception of all forms of transport; 11) obligation to refrain from performing the activities specified in this paragraph or from exercising any of the rights specified in the said paragraphs; 12) the granting of the right to access natural gas and electricity supply systems, to transport natural gas and/or electricity by natural gas and electricity supply systems and to other services directly related thereto; 13) the services of agents when they procure for their principal any of the services referred to in this paragraph.
116. In derogation of paragraph 1 of this Article, the place of the supply of electronically supplied services shall also be deemed to be within the territory of the country in the case when they are supplied to the person who is not a taxable person, who has its seat (if it is not a natural person) or has his permanent address or usually resides (if he is a natural person) within the Republic of Lithuania by the person who has established his business outside the territory of the Community or when the service is supplied through a subdivision situated outside the territory of the Community.
117. In derogation of paragraph 1 of this Article, the place where the services of telecommunications and radio and television broadcasting services are supplied shall be within the territory of the country also when the services are performed for a non-taxable person who has a fixed establishment (if it is not a natural person) or has his permanent address or usually resides within the Republic of Lithuania (if he is a natural person), by the person who has established his business or has a fixed establishment outside the Community territory or if the service is supplied through a subdivision established outside the territory of the Community and the effective use of the supplied service takes place within the territory of the country.
118. By way of derogation from the provisions of paragraph 1 above, the place of supply of the services of hiring out of forms of transport shall be considered as situated within the territory of the country if the services are supplied by the person who has established his business or has a fixed establishment outside the Community territory or if the service is supplied through a subdivision established outside the territory of the Community and the effective use of the hired transport takes place for the most part within the territory of the country.
119. In derogation of paragraph 1 of this Article the place of supply of the services of hiring out of forms of transport shall not be considered as situated within the territory of the country if the services are supplied by the person who has established his business in the territory of the country or a foreign person through a subdivision established in the territory of the country and the effective use of the hired transport takes place for the most part outside the territory of the Community.
120. By way of derogation from the provisions of paragraph 1 above, the place of supply of the services of development, sale and other transfer of non-standardised software shall be within the territory of the country shall also be deemed to be within the territory of the country when they are supplied to the person who is not a taxable person, who has its seat (if it is not a natural person) or has his permanent address or usually resides (if he is a natural person) within the Republic of Lithuania by the person who has established his business outside the territory of the Community or when the service is supplied through a subdivision situated outside the territory of the Community and the effective use of the supplied service takes place within the territory of the country. Article
121. The Place of Supply of Transport Services
122. The place where transport services (intra-Community transport services excluded) are supplied shall be deemed the territory of the country in case the services are actually supplied within the territory of the country. Where the services are actually supplied both within and outside the territory of the country, the part of the service supplied within the territory of the county shall be deemed to be proportionate to the part of the route running within the territory of country.
123. The place of the supply of services in the intra-Community transport of goods shall be deemed to be within the territory of the country where the place of departure is situated within the territory of the country, except where the purchase of the services is a VAT payer identified for purposes of value added tax in another Member State and he indicated the identification number when acquiring the services.
124. The place of the supply of services in the intra-Community transport of goods shall be deemed to be within the territory of the country also where the place of departure of intra-Community transport of goods is not within the territory of the country but the purchaser of the services is the VAT payer identified for purposes of value added tax in the Republic of Lithuania and he indicated the identification number when acquiring the services.
125. The place of the supply of services ancillary to the intra-Community transport of goods (loading, unloading, handling, organisation of transport of goods by special stationary transport installations and other ancillary services necessary when transporting goods by certain means of transport or stationary transport installations) shall be deemed to be within the territory of the country when they are actually performed within the territory of the country except where the purchaser of services ancillary to the intra-Community transport is identified for purposes of value added tax in another Member State and he indicated the identification number when acquiring the services.
126. The place of the supply of services ancillary to the intra-Community transport shall be deemed to be within the territory of the country also where the services are actually supplied in another Member State, but the purchaser of the services is the VAT payer identified for purposes of value added tax within the Republic of Lithuania and he indicated the identification number when acquiring the services.
127. The place of the supply of services of agents who act in the name and for the account of another, when they procure or supply services of intra-Community transport of goods or services ancillary to intra-Community transport shall be deemed to be within the territory of the country, when the services which are purchased or supplied though agency shall be deemed supplied within the territory of the country, except where the purchaser of the services is the VAT payer identified for purposes of value added tax in another Member State and he indicated the identification number when acquiring the services.
128. The place of the supply of services of agents who act in the name and for the account of another, when they procure or supply services of intra-Community transport of goods or services ancillary to intra-Community transport, which are deemed to be supplied in another Member State shall also be deemed supplied within the territory of the country when the purchaser of the services is the VAT payer identified for purposes of value added tax in another Member State and he indicated the identification number when acquiring the services. CHAPTER II CHARGEABLE EVENT AND TAXABLE AMOUNT Article
129. Chargeable Event
130. Unless otherwise provided in this Article, VAT on the good or service supplied within the territory of the country shall become chargeable upon the issue, in the manner established in this Law, of the VAT invoice.
131. In the case not specified in paragraph 1 of this Article or where the VAT invoice is not issued for the goods or service supplied, VAT shall become chargeable upon the occurrence of that of the events specified below, which occurs first, when: 1) the good is delivered or the service is supplied, or 2) the consideration for the supplied good or service is received.
132. Where, in accordance with the provisions of this Law, VAT on the good delivered or service supplied by a foreign taxable person is chargeable on the purchaser/customer, VAT on said good or service shall become chargeable upon the occurrence of that specified event, which occurs first: 1)when the purchaser/customer receives the invoice for the supply of goods or services; 2) when the purchaser/customer pays the consideration for the supplied goods or services; 3) on the last day of the tax period following the tax period when the goods or services were in fact supplied, provided no event specified in subparagraphs 1 and 2 of this paragraph occurred by the said day.
133. By way of derogation from the provisions of paragraphs 1, 2 and 3 of this Article, where payment for the goods or services is made in full or in part before the delivery of goods or supply of services, VAT shall become chargeable upon the receipt of the above-mentioned full or partial consideration on the amount received, provided that according to the terms of the contract the goods will be delivered or all services will be supplied not earlier than 12 months after the date of conclusion of the contract (hereinafter in the Law full or partial consideration payable before the delivery of the good or supply of the service shall be referred to as payments on account ). The provisions of this paragraph shall not be applicable in the cases where the taxable amount is the margin calculated in the manner laid down in Articles 102 and 107 of this Law.
134. By way of derogation from other provisions of this Article, in the cases where goods are supplied as specified in paragraph 2 of Article 4 of this Law, VAT shall become chargeable upon the delivery of the goods.
135. By way of derogation from other provisions of this Article, in the case where long-term services are supplied (i.e. services which are supplied for a certain continuous period (telecommunications, lease, etc.), also in the case of long-term supply of electricity, gas, heat, and other types of energy VAT shall become chargeable upon the issue, in accordance with the procedure laid down in this Law, of the VAT invoice for the supply of goods or services during the appropriate accounting period, and in case the invoice is not issued - upon the receipt of consideration for the amount of goods or services supplied during the accounting period. If the invoice for the supply of goods or services during the accounting period has not been issued by the 10th day of the month following the month when the goods or services were supplied and the consideration has not been received either, VAT shall become chargeable on the day following the expiry of the time period within which the document had to be issued. Where under the contract of lease the leased property is to be delivered to the lessee not earlier than after 12 months from the date of conclusion of the contract and the payment on account has been received, the provisions of paragraph 4 of this Article shall apply. If the services or goods specified in this Article are supplied by a foreign taxable person and, under the provisions of this Law, VAT shall become chargeable on the occurrence of that of the below-specified events, which occurs first: 1) upon receipt by the purchaser/customer of the invoice for the amount of goods or services supplied during the relevant accounting period; 2) upon payment of the consideration by the purchaser/customer for the amount of goods or services supplied during the relevant accounting period (including the payments on account payable under the contract of lease providing for the transfer of the leased property to the lessee not earlier than 12 months after the date of conclusion of the contract); 3) on the last day of the month following the accounting period, provided none of the events specified in subparagraphs 1 and 2 of this paragraph has occurred by the said day.
136. VAT on private use of goods and/or services by the VAT payer shall become chargeable at the moment of such use of the good or of the service.
137. VAT shall become chargeable on the tangible capital assets manufactured by the VAT payer himself when the VAT payer starts to use the assets in his economic activities (in case of material improvement of a building/structure - upon the completion of the improvement works).
138. The VAT payer who supplies agricultural products for the supply whereof a VAT invoice must be issued by the purchaser of agricultural products according to the procedure prescribed by this Law and other legal acts, shall have the right to choose a special procedure for determining the chargeable event, under which VAT on the supplied agricultural products becomes chargeable upon the payment of consideration for it. Where consideration is paid in instalments, VAT shall be chargeable on each instalment at the moment of payment thereof. Where subsidies or grants are payable for the supplied agricultural products, which are included in the taxable amount of the agricultural products, VAT shall become chargeable on the part of the taxable amount upon payment by the purchaser of an appropriate amount. VAT payer must declare his choice to apply the special procedure for determining the chargeable event specified in this paragraph to the local tax administrator in the manner prescribed by the central tax administrator and it shall be applied when calculating VAT on the agricultural products supplied starting from the next tax period after the filing of the application. VAT payer shall have the right to renege on his choice, but not earlier than after the lapse of 24 months from the beginning of the tax period when the application of the procedure was started, whereas VAT on the agricultural products which were supplied but the tax whereon was not calculated shall be calculated for the first tax period from which the application of the general procedure for the determination of the tax period had been resumed.
139. VAT on intra-Community supply of goods subject to the provisions of Chapter VI of this Law shall become chargeable upon the issue of the VAT invoice for the supply of the goods but not later than from the 15th day of the next month following the month when the goods were dispatched.
140. VAT shall become chargeable on intra-Community acquisition of goods upon the issue of the VAT invoice by the supplier of the goods but not later than from the 15th day of the next month following the month when the goods were dispatched.
141. Import VAT shall become chargeable upon the entry of the goods from the third country territory into the territory of the country. Where the goods imported into the territory of the Community are subjected to actions, procedures or arrangements specified in paragraph 1 or 3 of Article 123 of this Law, VAT shall become chargeable upon cessation of the application of the said actions, procedures or arrangements within the territory of the country.
142. Import VAT shall become chargeable on the goods on which import duties, agricultural or other levies and charges are imposed on the Community level under the relevant Community legal acts when the import duties, agricultural or other levies and charges become chargeable under the above legal acts. When goods are not subject to any import duties, agricultural or other levies and charges, import VAT shall become chargeable when under the relevant provisions of the Customs Code import debt to the customs would be chargeable within the territory of the country, if the goods were subject to the said duties or levies and charges.
143. When VAT becomes chargeable under paragraph 7 of Article 53 of this Law, VAT must be calculated upon the occurrence of the chargeable event specified in the Article. Article
144. Taxable Amount
145. The taxable amount which is the base for calculation of VAT shall comprise the consideration (excluding the VAT itself) which has been or is to be obtained by the supplier of goods or services (hereinafter in this Article - the seller) or, on his behalf, a third party. Where other goods and/or services are obtained in payment for the goods or services supplied, the consideration that would have been obtained if obtained in money shall constitute the taxable amount which is the base for calculation of VAT.
146. In the cases specified in paragraph 2 of Article 5, Article 51 or subparagraph 2 of paragraph 2 of Article 8 of this Law the acquisition price of the transferred or used object of the right of ownership or of the goods dispatched or transported into another Member State, i.e. the purchase price (excluding the VAT itself) or the cost price of manufacture by the VAT payer himself (excluding the VAT itself) shall constitute the taxable amount. Where the transferred or used object of the right of ownership or goods dispatched or transported into another Member State were used in the economic activities of the taxable person, the taxable amount shall be equal to the share of the acquisition price of the object of the right of ownership (good) calculated taking into account to what extent it is used up by the occurrence of the chargeable event.
147. In the case specified in subparagraphs 1 and 3 of paragraph 2 of Article 8 of this Law, the taxable amount shall be the expenses of the VAT payer (excluding the VAT itself) incurred upon giving the object of the right of ownership for use or accordingly supplying services. When the object of the right of ownership given for use is the VAT payer's capital assets, the amount of depreciation of the assets, which would be calculated under the laws regulating the taxation of profit (income) for the period during which the assets were given for use in the said manner, shall be attributable, inter alia, to the expenses incurred by the VAT payer.
148. In the case specified in Article 6 of this Law the taxable amount shall be the cost price of the capital asset manufactured by the taxable person himself (in case of material improvement of the building/structure - the value of the said works) (excluding the VAT itself).
149. The taxable amount shall in all cases include: 1) all taxes, duties, levies and charges, excluding the VAT itself; 2) expenses incidental to the supply of a good or service and charged to the purchaser (such as packing, transport, insurance costs, etc.); 3) any subsidies or grants directly linked to the final price of the good or service.
150. A subsidy or grant shall be considered as directly linked to the final price of the good/service provided all the following conditions are met: 1) it is paid to the seller; 2) it is paid by a third party; 3) the amount constitutes the consideration for the good/service or a part thereof.
151. The taxable amount shall not include: 1) price discounts and rebates allowed at the time of the supply of the good or service; 2) the amounts received by the seller as repayment for expenses paid out for the third persons in the name, for the benefit and on the account of the purchaser. The amount of the repayment in this case must be equal to the actual amount of the seller's expenditure in the above transactions.
152. The value of packing in which the goods are supplied (bottles, crates, containers or other packing necessary for keeping the goods) shall be excluded from the taxable amount of the supplied good only in the case where there is an agreement between the seller and purchaser to return the packing to the seller; however, if the packing is not returned within 12 months, the taxable amount in respect of the goods calculated by the seller must be increased by the amount equal to the value of the un-returned packing. Where the value of the returned packing are lower than the amount specified in the agreement, the taxable amount calculated by the seller must be increased by the amount equal to the difference in the values of packing. Where there is no agreement regarding the return of the packing, the value of the packing shall be included in the taxable amount of the goods supplied. Where the packing, the costs whereof have been included in the taxable amount of the goods supplied, is later returned, whereas the person returning the packing is refunded or is due to be refunded the amount equal to the value of the packing, the taxable amount of the goods shall be reduced by the amount equal to the value of the returned packing.
153. Where in case of the supply of goods or services it is provided that the purchaser must pay interest (for the deferred time of payment, also in case of financial lease (leasing), etc.) the amount whereof is specified in the contract, the sum of interest shall not be included in the taxable amount of the goods or services supplied. In such case it shall be considered for the purposes of this Law that two transactions have been effected - the principal transaction of supply of goods or services and the ancillary transaction - that of granting of credit, the taxable amount whereof comprises the above-specified interest.
154. For the purposes of the cases of supply of goods or services indicated in paragraph 2 of Article 9 of this Law the taxable amount shall be the value of the object of the right of ownership which is transferred. For the purposes of the cases of supply of goods or services indicated in paragraph 3 of Article 9 of this Law the taxable amount shall be the part of value of the object of the right of ownership deduction of the value added tax on which should be adjusted according to the procedure prescribed by Chapter VII of this Law.
155. For the purposes of paragraph 4 of Article 9 of this Law the taxable amount shall be the total costs of the works of material improvement of the building/structure (where the material improvement of the building/structure is handed over to the owner thereof immediately after the completion of the works) or a portion thereof corresponding to the number of years remaining until the expiry of adjustment period for VAT deductions, fixed in the this Law (where the material improvement of the building/structure is handed over to the owner at a later date).
156. The provisions of this Article shall not be applied in the cases specified in Chapter XII of this Law where the taxable amount in respect of supplies of goods and services shall be that which constitutes the margin calculated according to the procedure laid down in the Chapter.
157. In intra-Community acquisition of goods the taxable amount shall be established on the basis of the same rules as used to determine the taxable amount of supply of the same goods within the territory of the country. For the purposes of paragraphs of 3 and 4 of Article 41 of this Law the taxable amount shall be the acquisition price i.e. the purchase price of the specified goods (excluding the VAT itself) or the cost of manufacture for himself (excluding the VAT itself). Where the good was used in the economic activities of the taxable person, the taxable amount shall be equal to the part of the acquisition price thereof determined taking into account what part of the good had been used up in the economic activities of the taxable person on the occurrence of the chargeable event. In case of acquisition of a good in respect of which application of the circumstances specified in paragraph 1 of Article 53 of this Law was discontinued in the Member State and this was no reason for the VAT on importation to become chargeable in the Member State, the taxable amount in respect of the imported goods shall also include the services which in the other Member State were subject to zero-rate of VAT or exempt from VAT under the provisions equivalent in essence to the provisions of Article 53 of this Law on charging zero-rate of VAT on the supply of services and were not included in the acquisition price.
158. Where services of intra-Community transport of goods are supplied and part of the transport route crosses Community extraterritorial waters, the taxable amount of the service shall be reduced by the part proportionate to the extraterritorial part in the entire route.
159. The taxable amount in respect of imported goods on which the VAT on importation is levied shall be calculated by adding the following amounts (insofar as they are not already included in the customs value of the goods) to the customs value established on the basis of the Customs Code and the legal acts regulating the application thereof (and in case of Community goods the entry whereof in the Community territory is considered as importation - to the value of goods established subject to the provisions of the Customs Code and the legal acts on the establishment of the customs value) : 1) the paid or payable duties, taxes and other charges due outside the Community or outside the Republic of Lithuania and duties levied on the goods within the Community and taxes on the goods and other charges due in the Community or the Republic of Lithuania by reason of importation (excluding the VAT itself); 2) costs of transportation of goods, also ancillary transport services and insurance, costs of paid or due commission for agency services and packing costs, incidental to transportation of goods up to the first place of destination within the territory of the country. For the purposes of this Article, first place of destination within the customs territory of the country shall mean the place of delivery of goods indicated on the consignment notes or, in the absence of such an indication, the first place of transfer of goods into the customs territory of the country; 3) incidental expenses, such as costs of services specified in subparagraph 2 of this paragraph, where they result from transport to the first place of destination within the customs territory of the Community, if that place is known when the chargeable event occurs.
160. When goods have been temporarily exported from the Community and are re-imported having undergone outside the Community repair, processing or adaptation or after having worked up or reworked abroad, in derogation of paragraph 15 of this Law their taxable amount shall be the value of the relevant services supplied outside the Community territory, established subject to the provisions of this Law.
161. Price discounts and rebates allowed at the time when VAT on importation became chargeable shall not be included in the taxable amount of the imported goods.
162. The provisions of paragraph 8 of this Article shall be applied mutatis mutandis with respect to the packing of imported goods.
163. Where, after the occurrence of the chargeable event, the good or service is refused or returned or the seller allows discounts or rebates (upon compliance with certain additional terms and conditions or for other reasons) or it is proved that the VAT on the goods acquired from another Member State has been paid in the Member state where the transport of the goods ended, the taxable amount in respect of the good or service shall be reduced accordingly.
164. Where the taxable amount of imported goods is expressed in the currency other than the national currency of the Republic of Lithuania, the taxable amount shall be assessed in the national currency in compliance with the provisions of the Customs Code and the regulating legal acts.
165. In the cases other than those indicated in paragraph 20 of this Article, where information for the determination of the taxable amount is expressed in a currency other than the national currency of the Republic of Lithuania, the taxable amount shall be assessed in the national currency at the exchange rate established by the Bank of Lithuania recorded at the time the tax becomes chargeable, or, where the consideration payable by the purchaser change due to the circumstances specified in Article 83 of this Law, on the day of recording of the circumstances.
166. When VAT becomes chargeable under Article 53 of this Law, VAT shall be calculated on the taxable amount assessed in compliance with the rules laid down in this Article. Article
167. Taxable Amount in Case of Agency Services
168. The taxable amount in respect of the services supplied by the disclosed agent shall be the amount of consideration for agency (commission) calculated according to the procedure laid down in Article 15 of this Law.
169. The taxable amount in respect of supplies of goods and services both to the disclosed agent and by the agent himself shall be determined as the total value of the supplied goods or services calculated according to the procedure established in Article 15 of this Law. Article
170. Calculation of the Taxable Amount on the Decision of the Tax Administrator
171. In the cases where the tax administrator has grounds to suspect that the taxable amount of the supplied good or service has been artificially increased or reduced, it shall have the right to calculate the taxable amount . The taxable amount of the supplied good or service may be considered artificially reduced or increased in the case where upon giving due consideration to all conditions of the transaction the taxable amount does not correspond to the open market value of the good or service (it has been fixed having regard to an individual purchaser - related person, etc.).
172. The taxable amount shall be calculated, on the decision of the tax administrator, on the basis of the open market value determined in accordance with the methods approved by the Government of the Republic of Lithuania or an institution authorised by it and following the procedure of their application.
173. The provisions of this Article shall not apply to the supply of goods or services effected for consideration fixed by state or municipal institutions and agencies or in the international agreements of the Republic of Lithuania. CHAPTER III RATES OF VAT Article
174. Application of the Rate of VAT The rate of VAT applicable to the supply or intra-Community acquisition of goods or services and the importation of goods shall be that rate of VAT fixed in this Law which was in force the at the time when VAT became chargeable. Article
175. Rates of VAT
176. In the cases of supply of goods and services, and intra-Community acquisition of goods which are not provided in paragraphs 3, 4 and 5 of this Article and Chapters IV and V of this Law, standard rate of VAT shall be applied.
177. Standard rate of VAT shall apply to imports of goods which are not indicated in paragraph 3 of this Article and in Chapter V of this Law.
178. The reduced rate of VAT of 5% shall be applied to: 1) passenger transport by regular routes determined by the Ministry of Transport and Communications or an institution authorised by it, passenger transport by passenger trains as well as transportation of passenger luggage referred to in this subparagraph; 2) books (including brochures, leaflets and similar printed manner, children's picture, drawing or colouring books, music printed or in manuscript, maps and hydrographic and similar charts, excluding globes, calendars, note books and other similar printed matter), newspapers and periodicals, except for publications publicising eroticism and violence, which have been recognised as such by an institution authorised by legal acts and printed matter 4/5 of which is devoted to paid advertising; 3) pharmaceuticals (including pharmaceutical products for veterinary purposes), products used for contraception and sanitary protection (personal hygiene) for women, special purpose food products for children, special medicinal purpose food products and special medicinal body and dental care products, also medical equipment, aids and other appliances normally intended to alleviate or treat disability. The groups of medicinal products indicated in this subparagraph, on which VAT is chargeable at the reduced rate shall be approved by the Government of the Republic of Lithuania; 4) accommodation at hotels and other special accommodation services supplied according to the procedure laid down in the legal acts regulating tourist activities; 5) organic food products if they meet the requirements of legal acts in force in the Republic of Lithuania; 6) chilled meat and edible offal (with the exception of meat and edible offal of poultry) if it meets the requirements of legal acts in force in the Republic of Lithuania and conforms to the Lithuanian standards if such standards have been approved; 7) chilled, frozen and deep frozen meat and edible offal of poultry if it conforms to the requirements of the legal acts in force in the Republic of Lithuania and Lithuanian standards if such standards have been approved; 8) services to agriculture supplied by agricultural companies and co-operative societies - agricultural entities to their members (according to the list of agricultural services approved in Annex 1 to this Law); 9) live, fresh and frozen fish if it conforms to the requirements of the legal acts in force in the Republic of Lithuania and Lithuanian standards if such standards have been approved; 10) attendance of various artistic and cultural as well as sporting events with respect to which provisions of Article 23 of this Law shall not be applied.
179. Reduced 9% rate of VAT shall be applied to supplies of services relating to construction, renovation and insulation of residential houses which are financed with state and municipal budget resources as well as with soft credits granted by the state and resources of state special funds.
180. Zero-rate of VAT shall be charged on the supplies of goods and services as well as intra-Community acquisition of goods specified in Chapter VI of this Law. CHAPTER IV SUPPLIES OF GOODS, SERVICES AND INTRA-COMMUNITY ACQUISITIONS EXEMPT FROM VAT Article
181. Goods and Services Related to Health Care
182. Personal and public health care services provided by persons who have acquired, according to the procedure established by legal acts, the right to provide the above services shall be exempt from VAT.
183. Supplies of goods by the persons specified in paragraph 1 of this Article as well as supplies by the said persons of services other than those referred to in paragraph 1 of this Article shall be exempt from VAT provided all the following conditions are met: 1) the goods and services are supplied to the users of services referred to in paragraph 1 of this Article; 2) the supply of the above goods and services is linked to the supply of services referred to in paragraph 1 of this Article.
184. The Government of the Republic of Lithuania shall have the right to lay down the conditions of and impose restrictions on the application of provisions of paragraph 2 of this Article.
185. The supply of human organs, blood (conserved blood and blood components) and breast milk as well as dental prostheses supplied by dentists and dental technicians shall be exempt from VAT.
186. The supply of transport services for sick or injured persons or other persons in need of medical aid in vehicles specially designed for the purpose shall be exempt. Article
187. Social Services and Connected Goods
188. Exempt from VAT shall be the supply of social services by children and young people care institutions, by old people's homes and/or by the care/guardianship institutions for the disabled or by other non-profit making legal persons.
189. The supplies of goods and services other than those specified in paragraph 1 of this Article by the persons referred to in paragraph 1 of this Article shall be exempt from VAT provided the following conditions are met: 1) the goods and services are supplied for the users of services specified in paragraph 1 of this Article; 2) the supply of the above goods and services is linked to the supply of services referred to in paragraph 1 of this Article.
190. The Government of the Republic of Lithuania shall have the right to lay down the conditions of and impose restrictions on the application of provisions of paragraph 2 of this Article. Article
191. Education and Training Services
192. Pre-school education, primary, general, secondary, tertiary and higher education, additional training of children and young people (in art, music, other spheres), studies at higher educational establishments, vocational training shall be exempt from VAT if provided by legal persons who are qualified under laws to provide the above services, also exempted shall be in-service training and retraining, where the services are supplied by non-profit making legal persons who have acquired the right to supply the services according to the procedure prescribed by legal acts.
193. Supplies of goods by the persons specified in paragraph 1 of this Article as well as supplies by the said persons of services other than those referred to in paragraph 1 of this Article shall be exempt from VAT provided all the following conditions are met: 1) the goods and services are supplied to the users of services referred to in paragraph 1 of this Article; 2) the supply of the above goods and services is linked to the supply of services referred to in paragraph 1 of this Article..
194. The Government of the Republic of Lithuania shall have the right to lay down the conditions of and impose restrictions on the application of provisions of paragraph 2 of this Article.
195. Tuition given by natural persons shall be exempt from VAT provided their syllabi correspond to the general, secondary and higher education syllabi in the respective subject. Article
196. Cultural and Sports Services
197. Cultural services supplied by non-profit making legal persons shall be exempt from VAT. For the purposes of this Article, the following shall be considered as cultural services: 1) activities of museums, zoological and botanical gardens, circus; 2) various cultural events (theatre performances, choreographic performances, cultural events for children and young people, art exhibitions and exhibitions of folk art, etc.), film production (including ancillary activities - dubbing, subtitling, etc.), film rent and demonstration; 3) services in the field of bibliography and information supplied by libraries.
198. Supplies of goods by the persons specified in paragraph 1 of this Article as well as supplies by the said persons of services other than those referred to in paragraph 1 of this Article shall be exempt from VAT provided all the following conditions are met: 1) the goods and services are supplied to the users of services referred to in paragraph 1 of this Article; 2) the supply of the above goods and services is linked to the supply of services referred to in paragraph 1 of this Article.
199. The Government of the Republic of Lithuania shall have the right to lay down the conditions of and impose restrictions on the application of provisions of paragraph 2 of this Article.
200. Supply of services linked to physical education and sport by non-profit making legal persons shall be exempt from VAT. For the purposes of this Law, the following services shall be considered linked to physical education and sport: 1) granting of the right to participate in a cultural or sport event. The provisions of the subparagraph shall not be applicable to the sale of tickets to physical education or sporting events; 2) supply of services to the participants in physical education or sporting events directly linked to their participation, i.e. the granting of the right to use special premises, territories and/or inventory for physical education and sport, the services of training of participants and other similar services. The services relating to provision of accommodation, catering and transport shall not be attributable to the above-mentioned services. Article
201. Activities not Specified in Articles 20, 21, 22 and 23
202. Services supplied to their member by political parties, trade unions and other non-profit making legal persons set up and operating on the membership basis shall be exempt from VAT provided that the services conform to the aims of the legal person determined in the bylaws/regulations thereof as well as the goods supplied by the persons to their members (where supply of the goods is connected with the supply of services) and no consideration is obtained for the above services in addition to membership fees.
203. Supply of services by religious communities, associations and centres for the benefit of their members if the services conform to the aims provided in the cannons, statutes and other norms of the said persons as well as the goods supplied by the persons to their members (where the supply of the goods is connected with the supply of services), where, save for donations, no additional consideration is received for the goods and services, shall be exempt from VAT.
204. Certain supply of staff by religious communities, associations and centres provided for the activities indicated in Articles 20, 21 or 22 of this Law shall be exempt from VAT.
205. Supplies of goods and/or services by non-profit making legal persons, engaged in the activities specified in Articles 20, 21, 22 and 23 of this Law or paragraphs 1, 2 or 6 of this Article during charitable and sponsorship events organised by the said persons (including sale of tickets to the events) shall be exempt from VAT if the balance of the collected funds remaining after covering the expenses related to the organisation of the event are to be allotted only for charity and/or community service engaged in by the above persons. The provisions shall be applicable to not more than 12 charitable and sponsorship events organised by a specific legal person in the course of a calendar year. If more than 12 events are organised during a calendar year, each subsequent event and related supplies of goods and/or services shall be subject to VAT according to the procedure laid down in this Law. For the purposes of this Law, a cultural event (theatrical, musical, choreographic, etc.), a fair or a similar event shall be considered a charitable or sponsorship event provided it is indicated during the preparatory stage of the event (on the tickets, posters or otherwise) that after covering the organisational expenses, the total balance of the funds collected during the event will be allotted for charity and/or community service performed by the legal person organising the event. For the purposes of this Law, charity and community service shall be interpreted in accordance with the definition of the terms in the Law of the Republic of Lithuania on Charity and Sponsorship.
206. Services supplied by independent groups whose activities are exempt from or are not subject to value added tax for the purpose of rendering their members the services directly necessary for the exercise of their activity, where these groups merely claim for their members exact reimbursement of their share of the joint expenses.
207. The supply of services and of goods closely linked to the protection of children and young persons by bodies governed by public law or other organisations recognised as charitable.
208. If it is established that due to the application of provisions of this Article the goods and/or services supplied by legal persons indicated in this Article have gained unjustified competitive advantage over the goods and/or services supplied by other taxable persons which are or may be competitive, the Government of the Republic of Lithuania or an institution authorised by it shall have the right to establish limitations for the application of this Article. Article
209. Postal Services
210. The postal services supplied by the supplier of universal postal services and the supply of goods incidental thereto shall be exempt from VAT.
211. The list of postal services referred to in paragraph 1 of this Article which are exempt from VAT shall be approved by the Government of the Republic of Lithuania or an institution authorised by it.
212. The provisions of this Article shall not be applicable to the sending of postal parcels. Article
213. Radio and Television
214. Supply to the public of public information services by non-profit making legal persons - radio and/or television broadcasters shall be exempt from VAT.
215. The provisions of paragraph 1 of this Article shall not be applicable to the sale of broadcasts, advertising services and other commercial activities. Article
216. Insurance Services All types of insurance and re-insurance services, except for those indicated in Article 46 of this Law as well as insurance and reinsurance transactions, including related services performed by insurance brokers and agents, shall be exempt from VAT. Article
217. Financial Services
218. Granting of credit, also management of the granted credit by the taxable person granting it shall be exempt from VAT.
219. Unless otherwise provided in Article 46, the granting of financial guarantee or other security for money, also management of the granted guarantee or suretyship shall be exempt from VAT if performed by the taxable person granting the guarantee or surestyship.
220. The services of taking and managing of deposits and other repayable funds, clearing services between banks and/or other credit institutions, also other services connected with the arrangement of settlements, money transfer, organisation of non-cash settlement (including issue of bank cards or other payment instruments, servicing of the holders thereof and performance of transactions related thereto), issue of letters of credit and transactions related thereto, also transactions related to debts and debt obligations shall be exempt from VAT. The provisions of this paragraph shall not be applicable to debt collection services, also to the factor's services supplied under the factoring agreement.
221. Currency transactions (including currency exchange), also accepting contributions in cash and disbursing payments, cash management and other services directly connected with bank notes and coins of any currency shall be exempt from VAT.
222. Transactions in securities, derivatives, also agency services in the above-mentioned transactions (organisation, making, registration, etc. of the issue) shall be exempt from VAT. The provisions of this paragraph shall not be applicable with respect to: 1) transactions in securities establishing any rights to the property immovable by its nature; 2) transactions in securities (except for those specified in Article 111 of this Law) establishing title to goods not specified in subparagraph 1 of this paragraph,; 3) transactions in securities establishing the right or obligation to acquire or assign securities specified in subparagraph 2 of this paragraph; 4) safekeeping of securities and/or derivatives; 5) management of securities and/or derivatives portfolios, consulting on investment into securities and/or derivatives, also research of securities and/or derivatives markets.
223. Management of assets of special investment variable capital companies, investment funds and pension funds as well as management of funds of pension programmes shall be exempt from VAT.
224. A taxable person providing services specified in paragraphs 1 to 4 of this Article shall have a right of option to calculate VAT on the services according to the procedure established by this Law where the purchaser/customer is a VAT payer, and the excise of that option shall be valid not less than 24 months from the day of declaration of the option with respect to all transactions concluded by him. The taxable person shall declare this option in the manner prescribed by the central tax administrator.
225. A detailed list of services indicated in paragraphs 1-4 of this Article shall be determined by an institution authorised by the Government of the Republic of Lithuania. Article
226. Special Marks Exemption from VAT shall be granted to postal prepayment impressions and other special marks specified in the list approved by the Government or an institution authorised by it, which are sold at face value. The above provision shall be applicable only to those postal prepayment impressions which may be used in the Republic of Lithuania for confirming payment for a supplied postal service. Article
227. Betting, Gambling and Lotteries Exemption from VAT shall be granted to collection of payments from the participants in the lottery in the amount of nominal value of lottery tickets/cards, also collection of payments from the participants in the betting or gambling irrespective of whether or not the payment in of the amount has to be confirmed by issuing the participant in the game with a chip, card, etc. Article
228. Letting and Leasing of Property Immovable by its Nature
229. Exemption from VAT shall be granted to the letting or leasing of residential premises, with the exception of: 1) the provision of accommodation in hotels, motels, camping sites or in sectors with a similar function; 2) the letting or leasing of residential premises not specified in subparagraph 1 of this paragraph, for a term not exceeding 2 months;
230. Exemption from VAT shall be granted to the letting or leasing of items of property immovable by its nature other than residential premises, with the exception of: 1) the letting or leasing of premises, sites, garages for parking or keeping of any means of transport (including aircraft, ships, rolling stock) or other property with a similar function, immovable by its nature; 2) the letting or leasing of any permanently installed equipment (including safes) in keeping with the concept of property immovable by its nature.
231. A taxable person shall have a right of option for calculating VAT in the manner established in this Law, on the letting or leasing of property immovable by its nature, which is exempt from VAT under paragraph 1 or 2 of this Article, but not in the case where the property is let or leased to the VAT payer and this option shall be valid not less than 24 months with respect to all transactions concluded by him. The taxable person shall declare this option in the manner prescribed by the central tax administrator.
232. Termination for consideration of the contract of lease of property immovable by its nature shall be exempt from VAT if the leasing of the property was exempt from VAT. Article
233. Sale or Other Transfer of Property Immovable by its Nature
234. The sale or other transfer of buildings, structures or sections thereof (with the exception of new buildings and structures, new sections of buildings and structures) shall be exempt from VAT where under the conditions of the contract the person to whom the property is transferred or a third party acquires the right to dispose thereof as its owner. It shall be considered that: 1) a new building or structure is an unfinished building or structure, also a finished building or structure for a period of 24 months following its completion (after it has been found fit for use) or following its material improvement; 2) a new section of a building or structure is a section of a new building or structure within the meaning of subparagraph 1 of this paragraph, also a newly built section of an old building or structure - for a period of 24 months following its completion.
235. Exemption from VAT shall be granted to the sale or any other transfer of land where under the contract conditions the person to whom the land is transferred or a third party acquires the right to dispose thereof as its owner, with the exception of the land transferred together with a new buildings or structures or sections thereof as well as building land. Within the meaning of this Article, building land means a plot of land assigned for construction works regardless of whether or not any development of the plot has been undertaken.
236. A taxable person shall have a right of option for calculating VAT in the manner established in this Law on the property immovable by its nature which is exempt from VAT under paragraph 1 or 2 of this Article, however, only in the case where the property is sold or otherwise transferred to the VAT payer and this option shall be valid not less than 24 months from the day of declaration of the option with respect to all transactions concluded by him. The taxable person shall declare his option in the manner prescribed by the central tax administrator. The taxable person who sells or in any other manner transfers the property immovable by its nature to the VAT payer may choose to calculate the VAT under the conditions laid down in paragraph 2 of Article 4 of this Law if the supplier thereof when acquiring it calculated the VAT on it or not to calculate the VAT if when acquiring it the supplier did not calculate the VAT on it, regardless of whether or not the choice of 24 months to calculate the VAT was declared. Article
237. Special Cases of Exemption of Supplies of Goods or Services from VAT
238. Supply of goods shall be exempt from VAT where the VAT payer has not deducted any proportion of the input and/or import VAT on the said goods on the ground that: 1) the goods have been acquired or imported and used by no less than 99% by the VAT payer for the activities, which do not provide for deduction of input and/or import VAT; or 2) input and /or import VAT has not been deducted on the said goods as it is not deductible according to the provisions of paragraph 2 of Article 62 of this Law.
239. Other cases when supplies of goods and services are exempt from VAT are specified in Section Four of Chapter XII of this Law. Article
240. Special Cases of Exemption of Supplies of Goods or Services from VAT
241. The intra-Community acquisitions of goods shall be exempt from VAT where: 1) the supply of the same goods within the territory of the country would be in all circumstances exempt from VAT or zero-rate of VAT would be charged thereon under the provisions of this Law, or 2) under this Law import of the same goods would be in all circumstances exempt from VAT.
242. The intra-Community acquisition of goods shall be exempt from VAT, where the foreign taxable person acquiring the goods would in all circumstances be entitled to full reimbursement of the paid value added tax pursuant to the provisions of Chapter XII of this Law.
243. The acquisition of goods from any other Member State (other than the Member State in which he is identified for value added tax purposes) by a taxable person who is established outside the territory of the country, identified for value added tax purposes in any Member State (the Republic of Lithuania excluding), if in the territory of the country the acquisition of goods is effected for the purpose of a subsequent supply of the goods to the VAT payer who is liable under this Law for the calculation and payment of VAT due shall be exempt from VAT.
244. Other cases when intra-Community acquisitions of goods are exempt from VAT shall be set forth in Article
245. CHAPTER V EXEMPTIONS ON IMPORTATION Article
246. Importation of Goods Supply whereof in the Territory of the Country is Exempt from VAT Imported goods shall be exempt from import VAT if under the provisions of this Law the supply thereof in the territory of the country would be in all cases exempt from VAT or zero-rate of VAT would be charged thereon. Article
247. Goods Imported and Supplied to another Member State
248. Goods shall be exempt from VAT on importation where it is known at the moment of importation that they are intended to be and will be dispatched or transported to another Member State, whereas the supply of the imports of goods from the Republic of Lithuania to another Member State is charged zero-rate of VAT under the provisions of Chapter VI of this Law.
249. The provisions of this Article shall be applicable where the importer is identified for purposes of value added tax in the Republic of Lithuania while the goods are dispatched or transported to another Member State within a period not exceeding 1 month from the occurrence of the chargeable event specified in paragraphs 12 or 13 of Article 14 of this Law.
250. The procedure for implementing this Article shall be established by the Customs Department under the Ministry of Finance of the Republic of Lithuania (hereafter - Customs Department) in conjunction with the Central Tax Administrator. Article
251. Goods Intended for Diplomatic Missions, Consular Posts and Representations of International Organisations as well as the Staff of the Representations and Posts and their Family Members
252. Goods imported for use in the official activities in the Republic of Lithuania of foreign state diplomatic missions or consular posts shall be exempt from import VAT. Exemption from import VAT shall also be granted to imported goods intended for the personal use and/or for establishment of the place of residence of the members of diplomatic missions and consular posts and their family members living together, where aforesaid persons are not citizens of the Republic of Lithuania and have a permanent address or usually reside outside the Republic of Lithuania. Goods intended for use by foreign state diplomatic missions or consular posts or their members in other Member States in compliance with the conditions and restrictions prescribed by that Member State shall also be exempt from import VAT. The goods indicated in this paragraph shall be exempt from import VAT only where they are brought in under the arrangements which qualify for exemption from customs duties.
253. Exemption from import VAT shall be granted to goods imported by international organisations or their representations as well as members of the organisations or their representations. Importations of goods specified in this paragraph shall be exempt from VAT within the limits and under the conditions laid down by the international conventions establishing the organisations or by the agreements established by any Member State and an international organisation.
254. The procedure of application of provisions of paragraphs 1 and 2 of this Article shall be determined by the Government or the Republic of Lithuania or an institution authorised by it.
255. Pending the entry into force in the Republic of Lithuania of the multilateral treaty on the Status of the North Atlantic Treaty Organisation, National Representatives and International Staff, signed in Ottawa on 20 September 1951, but not longer than until 1 May 2004, the provisions of this Article shall also be applicable to supplies of goods intended for the implementation of NATO Security Investment Programme according to the procedure established by the Government of the Republic of Lithuania or an institution authorised by it. Article
256. Goods Imported by Passengers Goods imported by passengers shall be exempt from import VAT in the cases and according to the procedure established by the Government of the Republic of Lithuania, provided the quantity thereof does not exceed the quantity limits prescribed by the Government, which the passengers are allowed to import tax free. Article
257. Imported Gold Gold imported by the system of European central banks and the European Central Bank shall be exempt from import VAT. Article
258. Reimported Goods Reimported goods shall be exempt from VAT where all the following conditions are met: 1) goods are reimported by the person who exported them; 2) goods are reimported in the state in which they were exported; 3) goods qualify for exemption from customs duties. Article
259. Special Cases of Exemptions on Importation
260. The following shall be exempt form import VAT: 1) personal property of natural persons transferring their normal place of residence from another country to the territory of the Republic of Lithuania; 2) the property of natural persons transferring their normal place of residence from another country to the territory of the Republic of Lithuania by reason of marriage (trousseaux, household effects), also presents customarily given on the occasion of marriage; 3) imported property acquired by inheritance; 4) outfits, scholastic materials and household effects representing the usual furnishings for a student's room and belonging to students coming to study; 5) agricultural products imported by agricultural producers established in the Republic of Lithuania who obtained the products from properties used by them, located in a foreign county adjoining the territory of the Republic of Lithuania; 6) seeds, fertilisers and products for the treatment of soil and crops, imported by agricultural producers, having their principal undertaking in the foreign country adjoining the Republic of Lithuania, for use on properties used by them in the Republic of Lithuania; 7) laboratory animals and biological and chemical substanc