Tax rate by region Lithuania

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The information provided on this page is intended for general informative purposes only. It should not be interpreted as tax advice, nor is it meant to be. For advice on your particular tax responsibilities, consult with an experienced tax expert. PayPro Global does not assume any responsibility for any action taken or not taken based on the information presented here.

SaaS Sales Tax in Lithuania: A Comprehensive Guide for Businesses

As a dynamic European market, Lithuania presents exciting opportunities for SaaS businesses. Understanding the VAT landscape is crucial for navigating these opportunities effectively. Here’s a comprehensive overview of SaaS sales tax in Lithuania, providing insights into key regulations, compliance requirements, and best practices.

In Lithuania, SaaS sales tax adheres to the EU VAT system, implemented in 2004 to ensure streamlined tax collection and improved compliance. The standard VAT rate for SaaS services is 21%, mirroring the majority of EU countries. Notably, certain categories of educational services may be exempt from VAT, providing valuable opportunities for businesses catering to this specific market segment. For other categories, a reduced rate of 5% may apply, depending on the nature of the services offered.

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Lithuania

Lithuania implemented the EU VAT system in 2004, focusing on improving tax compliance and efficiency.

Official government link: VMI

21.00%

E-products and services VAT/Sales tax rate

5.00%

Reduced tax rate

Reduced tax rate product categories

E-books and other electronic publications have reduced rate

Exempted product categories

Some educational services may be exempt

Reverse charge mechanism for B2B sales

Yes

Tax ID validation required

Yes

When do you have to register

Non-resident companies have to register as soon as goods are being delivered or services are being provided

Online registration possible

Yes

Local representative needed

Yes

Registration procedure

To register, you need to complete a registration application. This involves providing the following details about the company in the designated application form:

Comprehensive information about the company.
The company’s name, trading name (if applicable), full postal address, email address, and website of the taxable person, along with the name and phone number of the contact person.
National tax number (if applicable).
The country where the taxable person has their place of business.
International bank account number (IBAN) or OBAN number and BIC.
An electronic declaration stating that the taxable person is not registered for VAT within the Union.
The date of commencement of using the scheme.
If the documents are in a language other than the official Lithuanian, they must be accompanied by a translation, signed and sealed by the translator.

List of digital and electronic services liable for tax

Electronic books, images, movies, and videos, whether purchased from platforms like Shopify or accessed through services such as Amazon Prime, are categorized in tax materials as “Audio, visual, or audiovisual products.”
Downloadable and streaming music, whether buying an MP3 or using music services.
Cloud-based software and as-a-Service products, including SaaS, PaaS, and IaaS.
Websites, hosting services, and Internet service providers.
Online advertisements and affiliate marketing.

Penalties

Businesses that fail to submit VAT returns by the deadline may incur a penalty, typically calculated as a percentage of the unpaid tax amount. If VAT is not paid by the due date, interest may accrue on the outstanding amount, with the rate set by the tax authority. Businesses required to register for VAT but fail to do so may face fines, varying based on circumstances and duration of non-compliance. Incorrect VAT reporting can result in penalties, including fines and the obligation to pay any additional tax owed. In addition to financial penalties, businesses may face administrative penalties, such as warnings or other actions by the tax authority. Severe tax evasion or fraud can lead to criminal penalties, including fines and imprisonment.

Registration threshold

No threshold, non-resident companies must register for VAT

Filing interval

Monthly

Filing deadline

Within 25 days after the end of the period

E-invoicing requirements

Yes

Record keeping

Relevant documents must be kept for at least 10 years

How-To Guides: Lithuania SaaS VAT

Step: 1 Threshold

Effective May 1, 2004, Lithuania requires non-EU vendors (including online platforms) of digital services to consumers (B2C) in Lithuania to register for and collect VAT, regardless of the sales amount. The obligation was expanded to EU-established digital services providers effective January 1, 2015.

 

Effective January 1, 2019, Lithuania applies a VAT registration threshold of EUR 10,000 for EUestablished digital services providers. The threshold does not apply to non-EU businesses.

• Non-EU/Foreign Businesses: €0 (First taxable sale). VAT applies from the first B2C sale; suppliers may register locally or use OSS.
• EU-Based Businesses: €10,000 distance selling threshold (cumulative across all EU states). If exceeded, you must register in Lithuania or via OSS.

Step: 2 Business Registration

Applications are submitted to the State Tax Inspectorate (VMI). Non-EU companies must typically appoint a Fiscal Representative unless a mutual assistance treaty exists.

Step: 3 TIN/VAT Number

PVM mokėtojo kodas (VAT identification number) is issued with the format: LT followed by 9 or 12 digits (e.g., LT123456789).

Step: 1 Standard VAT Rate

The standard VAT rate in Lithuania is 21% (standard VAT rate applied to SaaS and digital downloads).

Step: 2 VAT Formula

To calculate your tax amount, use the following formula:

 

Tax Amount = Net Price x 21%

Step: 3 Reverse Charge (B2B)

It applies to cross-border B2B services. If the buyer is a VAT-registered business in Lithuania, the seller does not charge VAT. The buyer accounts for it on their own return.

  • Product category eligible for reduced/exempt tax: Yes: 5% in 2026 on electronic books and certain electronic non-periodical publications.

Step: 1 Selling B2C

You must charge 21% Lithuanian VAT at the point of sale. Suppliers must collect two pieces of non-contradictory evidence to determine the customer’s location.

Step: 2 Selling B2B

Do not charge VAT if the buyer provides a valid VAT ID (verify via VIES). Mark the invoice as “Reverse Charge.”

Step: 3 Invoice Requirements

Must include:
• Supplier & Buyer full name and address.
• Supplier VAT ID (and Buyer’s for B2B)
• Unique sequential invoice number.
• Date of issue and date of supply.
• Description of SaaS/Services.
• Taxable amount and VAT rate (21%).
• Total amount due in EUR.

Step: 1 Filing Interval

Taxes are filed:

  • Standard: Monthly.
  • Quarterly: Only if annual turnover is below €300,000.

Step: 2 Filing Deadline

Taxes are filed by the 25th day of the month following the tax period.

Step: 3 Submission

Taxes can be filed electronically via the VMI portal (Mano VMI) or the i.SAF system (Standard Audit File for Tax). Payments are made via SEPA bank transfer to the VMI treasury account.

Step: 4 Record Keeping

Records and invoices must be kept for 10 years.

PayPro Global Solution: Simplified Registration & Fiscal Representation

Navigating Lithuania’s VAT registration and fiscal representation can be daunting. PayPro Global acts as your Merchant of Record, handling these complexities, including VAT registration and fiscal representation where needed, so you can focus on your business.

Learn more about our MoR services.

FAQ

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