Value Added Tax Rate in the Republic of Lithuania in 2011

  • 2011-01-27
  • Akvile Buzinskaite, Associate Lawyer

ECOVIS Miškinis, Kvainauskas ir partneriai advokat┼│ kontora

According to the Law on Value Added Tax, the standard value added tax (VAT) rate in the Republic of Lithuania this year is the same as in 2010 - 21 percent. The law also provides for 0 percent VAT rate that is applicable in the supply of goods and services and purchase of goods from another European Union member state, in cases specified by the Law on Value Added Tax.

It should be noted that the Law on Value Added Tax enables not only the standard VAT rate to be applied, but also a reduced VAT rate. According to article 19 of the Law, the reduced VAT rate could be 9 percent and 5 percent. 
Reduced 9 percent VAT rate is applicable on:

1.    heat energy supplied for heating of residential houses, hot water for residential houses and cold water used for preparation of hot water, and heat energy used for heating of water;
2.    hotel-type and special accommodation services rendered in accordance with the procedure established by legislative acts regulating tourism;
3.    books and non-periodical information publications (including textbooks, exercise books, encyclopedias, dictionaries, directories, information brochures, illustrated books for children, music, maps, calendars, notebooks and other);

It also should be noted that reduced 9 percent VAT rate for different goods and services runs at different time. For example, the reduced 9 percent VAT rate on heat energy, hot water and hotel-type or special accommodation services is applicable till Dec. 31, 2011. The reduced 9 percent VAT rate on books and other non-periodical information publications is applicable for an unlimited period.

According to the Law on Value Added Tax, the reduced 5 percent VAT rate is applicable on medicines and medical aid devices when they are fully or partly compensated in accordance with procedures established by Lithuania legislation. This reduced 5 percent VAT rate is also applicable till Dec. 31, 2011.

Thereby, the legal regulation of Law on Value Added Tax allows to apply standard and reduced VAT rates,  with the reduced VAT rate applicable for specific goods and services, also for a definite period.