The primary purpose of this Tax & Legal Newsletter is to reflect the most important changes in the national legislation on taxes, finance and other issues that have been published in August 2003. This newsletter is based on the official publications of the State News No.79-83.
VALUE ADDED TAX
The State Tax Inspectorate at the Ministry of Finance has prepared the amendments ofto comments on Articles 64, 97 and 98 of the Law on Value Added Tax. These comments are published on the wWebsite of the State Tax Inspectorate at the Ministry of Finance (
The comment was supplemented with Tthe provision was added to the comment acaccording to which LTL 200 restriction on the deduction of input VAT on fuel (engine gasoline, diesel, liquefied gas) by cash receipts was abolished (except for the cases specified in the commentunless the comment provides otherwise).
RESIDENTS’ INCOME TAX
The State Tax Inspectorate at the Ministry of Finance has prepared the comments (explanation) on parts Sectionsparagraphs 1, 3-4, 6-7, 9, 11-12, 14-19 of part 1 of Article 17. of the Law on Residents’ Income Tax. These comments are published on the wWebsite of the State Tax Inspectorate (
OIL AND GAS RESOURCES’ TAX
Order No DĮ-125 of the Director of the Department of Statistics of 18 July 2003 on the Approval of the Order on Calculation of Average Sales Prices of Extracted Oil and related publication procedure (State News No No.79–3630)
Oil extracting companies submit data on average prices of extracted oil, which was sold in the domestic market or exported to the Department of Statistics on t hae monthly basis according to an approved order data on average pricebasis in accordance with the approved procedures of extracted oil which was sold on the domestic market or exported.
The annex to the monthly report KA – 08 (State News 91-3206, 2001) on Average Monthly Prices of Extracted Oil has been approved by OOrder N No DĮ-129 of the Director of the Department of Statistics of 6 August 2003. (State News No 79–3631) on
An annex to monthly report KA – 08 (State News 91-3206, 2001) Average Monthly Price of Extracted Oil has been approved.
Order No V-232 of the Director of the Department of StatisticsHead of The State Tax Inspectorate of 14 August 2003 (State News No 82-3778) has approved:
The order approved:
the form FR0566: quarterly return of oil an gas resource tax ofa calendar year
the form FR0567: annual return of oil and gas resource tax
the rules foonrfilhow these forms are filled ling them inin..
EMPLOYMENT OF FOREIGN RESIDENTS
Government Resolution No 1045 of 19 August 2003 on Approval of the OrdePrrocedure on Employment and Employment Conditions of Foreign ResidentNationalss Temporarily Stationed in Lithuania (State News No. 81–3692)
The resolution has approved the ordprerocedure of temporary employment and employment conditions of foreign resinationalsdents in Lithuania. FForeign reemployees sidentsstationed temporarily in the Lithuanian Republic must obtain a temporary residence permit. TheAIf a non-EU resident or his/her spouse or a person who does not have a right to work in the EU is to come for work in Lithuania a Lithuanian e enterprise, nt ity which intends on a temporary basis to temporarily employ a foreigner, whois a not an non-EU resident or his/her spouse, or who is a foreign national alegally working in the EU and has been sent by his/her employer to Lithuania for provision of services person who does not have a right to work in the EU, must submit to a territorial Labour Exchange:
the requesapplicationt of a set form ,supported with a copies of the company’s registration certificate excerpt and employer’s registration with the State Social Insurance Fund Board certificate to the local office of the Labour Exchange (according to the municipality area where the enterprise is registered).
the excerpt from the certificate of the social security policy holder.
The reapplication of the Lithuanian enterprise quest must be evaanalysed within 30 days by presenting a luated and a conclusion passed within 30 days. . Ifn case of a the conclusionpositive conclusion is positive the Lithuanian enterprise tityshall conclude with a foreign enterprise a co-operation agreement, which is submitted to the Lithuanian Labour Exchange and the foreign entity that permanently employs the person in question shall conclude a cooperation agreement and present it to the Labour Exchange together with the excerpcopies of personal identification ts of documents of the foreign employeesresident in question. The decision as regards permission for the Lithuanian enterprise to employ foreigners is made aA resolution ond the permission and the permit arise issued to the LLithuanian entierprise ty within 5 busworkinginess days from the date of submission of the above said documents.
EVALUATION OF GOODS AT CUSTOMS
The Government Resolution No 1069 of 22 August 2003 on Amendment of the Government Resolution No 748 of 9 June 1999 on the OrdeProcedureronof Evaluation of Goods at Customs effective from 1 September 2003 (State News No. 82–3753)
The resolution stipulates that after the goods are cleared for free circulation, when setting the customs value according to article 30 of the Customs Code, , adjustments of the amounts opaid or f the payment due for goods made by a seller in favour of a purchaser may be considered wonly if acceptable evidence is provided to the Customs proving conformity withhen determining the Customs value of the goods provided that certain con all below listed conditions are met:
the goods had defects at the moment of acceptance for a Ccustoms revisioclearancenas prescribed indetermined in article 66 of the Customs Code;
the seller has madkesthe adjustmentscorrections in accordance with with the quality obligationsliabilities (those relating to price reduction if defects of goods are established, or other) as stated in a purchase purchase and sale contract, whiconcluded before ch was made before the clearance of goods for free circulation;of the goods
the agreement ( contract) does not provideinclude a statement that the goods are defective.
SuIt is not required to declare the customs value of goods bmission of the declaration on customs values of goods is not required if the the customs value of tthe consignment pa ckage of goods dostands below LTL es not exceed 10,000 Litas (LTL 3,000 Litas until 1 September), uexcept for cases when the shipment comprises a part of the consignment between the same sender and recipient of goods, or when the data stated in the customs value declaration are necessary to ensure accuracy as regards imposition of customs duties and (or) taxes. nless the dispatch comprises a part of a series of dispatches between the same parties.
ALCOHOL PRODUCTS
On 19 August 2003 the Government of the Republic of Lithuania issued a Resolution No 1050 on amendment to the Government Resolution No 67 of 22 January 2001 on approval of regulations for licensing alcohol production (State News No 81 (1)–3697)
This Resolution changed the regulations for licensing alcohol production and resolved that starting from 1 January 2004 the right to produce strong alcohol beverages with alcohol volume concentration exceeding 22 percent shall be granted not only to joint stock companies where the state owns shares with not less than 2/3 of voting rights.
Furthermore, the Resolution contains adjusted codes of alcohol products in accordance with the 2003 edition of the Combined Commodity Nomenclature.
LABOUR LAW
On 19 August 2003 the Government of the Republic of Lithuania issued a Resolution No 1043 on approval of employment agreement characteristics (State News No 81 (1)-3690)
The Government hereby approved:
-Basis for execution of a temporary employment agreement, peculiarities of its amendment, expiration, the characteristics of work and rest of temporary employees. A temporary employment agreement may be drawn for execution of short-term assignments, for substitution for temporarily absent employees (due to illness, vacation, etc.) for not longer than a 2-months period. A temporary employment agreement may also be signed with students for a holiday period in accordance with the provisions of the Labour Code of the Republic of Lithuania and other relevant legislation.
-Characteristics of an employment agreement for a secondary position (job). Apart from other terms and conditions, an employment agreement on a secondary position (job) inter alia shall contain that an employee is employed in a secondary position for an agreed upon job. Prior to signing an agreement, an employee willing to take a secondary position (job) shall provide the employer, who hires the employee for a secondary position (job), with a statement from the primary employer on the daily working hours of the employee. Upon receipt of the statement on the working hours, the employer shall ensure that a person with 2 or more employment agreements does not work more than 12 hours per day (including the breaks for rest and meals).
-Peculiarities of employment agreements with outworkers. Outworkers may not be assigned to perform work related to hazardous biological, chemical, cancerous actions and mutagens or substances that may cause the above. Outwork time may not exceed 40 hours per week. The outwork agreement may contain a provision that the outworker shall be compensated for the expenses incurred in relation to the work and for the time spend on repair of machinery and equipment and replacement of tools.
-Peculiarities of attendance agreements. Attendance agreements shall contain the daily working hours. The working day may be interrupted. Upon conclusion of an attendance agreement, the employer may not provide the employee with an employment certificate.
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Newsletter on Tax & Law Issues / No. 10 / 15 September 2003Disclaimer
The information contained in this Newsletter cannot be considered as legal opinion.Implementation of and changes to new Lithuanian legislation are in a dynamic state. The laws may at times appear to be internally inconsistent or in conflict with each other, and a number of questions may arise regarding interpretation, understanding and application of the legislation in general, as well as in the context of specific business cases and circumstances.
This guide is for information purposes only.
We strongly recommend the readers to seek professional advice from us, whenever decisions on investments into or regarding business activities in Lithuania are to be taken.
Persons to be contacted:
Kęstutis Lisauskas
Partner, Tax & Law – Baltics
Ernst & Young Baltic UAB
Subačiaus 7
LT 2001 Vilnius
Lithuania
Tel. 370 5 2742-200
Fax 370 5 2742-333
E-mail: / Gintaras Balčiūnas
Patrtner, Advocate
Law Firm Jurevičius, Balčiūnas & Partners
Didžioji 23 Subačiaus 7
LT 2001 Vilnius
Lithuania
Tel. 370 5 2742-400
Fax 370 5 2742-444
E-mail:
© 2002 Ernst & Young All rights reserved. 1 of 4