LAW                                              
                                                                                
                               ON                                               
                                                                                
                          TAX ADMINISTRATION                                    
                                                                                
                     OF THE REPUBLIC OF LITHUANIA                               
                                                                                
                                                                                
                              Chapter I                                         
                          GENERAL PROVISIONS                                    
                                                                                
     Article 1. Purpose of the Law                                              
       This   Law  shall  establish  the  basic  principles   and               
regulations which must be observed in implementing the  tax  laws               
of  the Republic of Lithuania, furnish a list of taxes applied in               
the Republic of Lithuania, establish the rights and duties of the               
tax  administrator,  rights  and  duties  of  the  taxpayer,  the               
procedure of tax computation and payment, collection of taxes and               
amounts thereof, as well as the dispute settlement procedure.                   
                                                                                
     Article 2. Basic Concepts                                                  
      Concepts employed within the tax law, if the tax  law  does               
not stipulate otherwise:                                                        
      tax denotes monetary obligation owed by the taxpayer to the               
state, established within the tax law in order that funds may  be               
obtained to fulfil state (municipal) functions;                                 
      charge and fee indicate a monetary duty established by law,               
exacted from a taxpayer for certain services provided for him  by               
state   institutions.  Charges  and  fees  shall  constitute   an               
additional  source of income for fulfilment of state  (municipal)               
functions;                                                                      
      tax  law  is  a  law  of the Republic  of  Lithuania  which               
establishes  the  tax, charge or fee, or other payment  into  the               
state  (municipal)  budget and also this Law  and  the  agreement               
mentioned in Article 4 of this Law;                                             
      person is a natural person (individual), a legal person, or               
an entity which does not possess the rights of a legal person;                  
     taxpayer is a person, for whom an obligation to pay taxes is               
established under the tax law;                                                  
      charge and fee payer indicates a person, who is obliged  to               
pay  a  charge or fee, established by laws, for services rendered               
by state institutions;                                                          
     tax administrator is an institution which is responsible for               
tax administration;                                                             
      tax  administration  comprises the  implementation  of  the               
rights  and  obligations  of the tax administrator,  as  well  as               
rights  and  obligations of the taxpayer, calculation  of  taxes,               
payment  and  collection, application of liability  for  improper               
calculation  and  payment  of taxes, distribution  of  taxes  and               
supplying of information for taxpayers;                                         
      tax  return indicates a document of tax calculation,  which               
must  be  completed and filed with the tax administrator  by  the               
taxpayer or tax withholder according to the procedure established               
by the tax law;                                                                 
      tax  arrears  indicates amount of  tax  not  paid  on  time               
according  to  the procedure prescribed by the tax  law,  by  the               
taxpayer or tax withholder;                                                     
     tax overpayment indicates amount of tax paid by the taxpayer               
or  withholder in excess of the tax amount prescribed by tax  law               
procedure;  a tax amount, which in the course of verification  is               
adjudged as too high by the tax administrator, is also considered               
an overpayment;                                                                 
      tax  calculation  is the filling out of  a  tax  return  or               
another document by indicating, in monetary terms, the tax amount               
required to be paid into the state (municipal) budget;                          
      tax base is an object, which is appraised to be subject  to               
taxation  according to the procedure established by tax  law,  to               
which an established amount of tax (rate) is applied;                           
      tax withholder is a person, for whom an obligation has been               
assigned, according to tax law, to withhold tax from the taxpayer               
and pay it into the state (municipal) budget;                                   
      tax law violation is the result of action which contradicts               
the tax law;                                                                    
      tax  procedure includes the taxpayer, tax base, tax amounts               
(rates), tax reliefs, penalties and interest, and tax payment  as               
well as withholding regulations, established by the tax law;                    
      tax  relief denotes special taxation conditions established               
for  the  taxpayer, requiring the payment of  a  lesser  tax,  or               
deferral of tax payment deadline, or permitting tax payment to be               
paid in several instalments;                                                    
      activity  denotes all activity of a person, as a result  of               
which a person could have received, or has received some income.                
                                                                                
     Article 3. Taxpayer Equality                                               
      In applying tax laws, all taxpayers shall be held equal  on               
the basis of the conditions established by these laws.                          
                                                                                
     Article 4. International Agreements                                        
       If   taxation  regulations  established  by  international               
agreements  differ  from those in tax laws and  these  agreements               
have  been  ratified in the Republic of Lithuania,  international               
agreement regulations shall apply.                                              
                                                                                
                                                                                
                           Chapter II                                           
                              Taxes                                             
                                                                                
     Article 5. Taxes                                                           
      1.  The following taxes shall be administered in accordance               
with this Law:                                                                  
     1) value added tax;                                                        
     2) excise tax;                                                             
     3) natural persons' income tax;                                            
     4) legal persons' profit tax;                                              
     5) enterprise and organisation immovable property tax;                     
     6) land tax;                                                               
     7) state natural resources tax;                                            
     8) oil and gas resources tax;                                              
     9) pollution tax;                                                          
     10) consular duty;                                                         
     11) stamp duty;                                                            
     12) market place duty;                                                     
     13)  deductions from sales revenue under the  Law  on  Road                
Stock of the Republic of Lithuania;                                             
     14) inheritance or gift tax;                                               
     15)  compulsory health insurance contributions  (Amended  6                
June 1996).                                                                     
      2.  Only  an  appropriate  tax law,  or  a  decree  by  the               
Government  of  Lithuania based on such,  or  another  legal  act               
passed  on  the  basis of such shall determine the procedure  for               
imposition of certain taxes.                                                    
      3. This Law shall not apply in administering customs duties               
and social insurance payments.                                                  
                                                                                
     Article 6. Implementation of Tax Law                                       
      1.  The Government of the Republic of Lithuania and, if  an               
authorisation  is given, the Ministry of Finance shall  implement               
the tax laws passed by the Seimas of the Republic of Lithuania as               
well  as  this  Law. No other state institution may  be  assigned               
implementation  of tax laws, except the Ministry of  Finance,  if               
this is not provided for in the tax law.                                        
     2. In the course of implementing tax laws, the Government of               
the Republic of Lithuania shall establish appropriate methods and               
regulations,  ensuring  tax administration,  or  shall  task  the               
Ministry of Finance to carry this out.                                          
      3.  No  subordinate legislation regarding questions of  tax               
procedure establishment, listed in part one of Article 5 of  this               
Law,  may  be  adopted without the consent  of  the  Minister  of               
Finance.                                                                        
                                                                                
     Article 7. Tax Administrators                                              
      1. The State Tax Inspectorate shall administer taxes listed               
in part one of Article 5 of this Law.                                           
      2.  The  Customs  of the Republic of Lithuania  shall  also               
administer the taxes listed in part one and two of Article  5  of               
this  Law,  however  only insofar as it is authorised  under  the               
Value Added Tax and Excise Tax Laws of the Republic of Lithuania.               
       3.   The  Environmental  Protection  Ministry  shall  also               
administer the taxes listed in Paragraphs 7, 8, and 9 of part one               
of  Article  5  of  this  Law, however  only  insofar  as  it  is               
authorised  according to Tax on State Natural Resources,  Tax  on               
Pollution and Tax on Oil and Gas Resources Laws.                                
                                                                                
                           Chapter III                                          
                     STATE TAX INSPECTORATE                                     
                                                                                
     Article 8. State Tax Inspectorate                                          
     1. The State Tax Inspectorate is a state institution founded               
at  the  Ministry  of Finance which is financed  from  the  state               
budget  and  other funds and is accountable to  the  Minister  of               
Finance. The State Tax Inspectorate is a legal person having  its               
own bank account, seal and symbols.                                             
      2. In order to reinforce the material base of the State Tax               
Inspectorate  and  provide  material  incentives  for  staff,  an               
additional sum of 30 percent shall be allotted from funds exacted               
in  the course of verification. 75 percent of the amount shall be               
allotted for reinforcement of the material base of the State  Tax               
Inspectorate,  while the remaining funds shall  be  utilised  for               
incentives and social guarantees of the tax inspectorate staff.                 
      3. The State Tax Inspectorate is guided by The Constitution               
of  the  Republic of Lithuania, this and other laws,  subordinate               
legal acts and regulations approved by the Government.                          
     4. The State Tax Inspectorate shall work in co-operation and               
exchange   information   with  all  tax   administrators,   state               
institutions and foreign state institutions, which administer the               
payment of taxes.                                                               
                                                                                
     Article 9. Structure of State Tax Inspectorate                             
     1. The State Tax Inspectorate is comprised of:                             
      1)  State Tax Inspectorate at the Ministry of Finance - the               
central tax administrator;                                                      
      2)  State  Tax  Inspectorates at the  Ministry  of  Finance               
territorial state tax inspectorates - local tax administrators.                 
     2. The local tax administrator shall be held subordinate and               
accountable to the central tax administrator.                                   
                                                                                
     Article 10. Central Tax Administrator's Work Organisation                  
      1.  The  State Tax Inspectorate at the Ministry of  Finance               
shall be headed by a chief who shall be appointed and relieved of               
his  duties  by the Prime Minister of the Republic  of  Lithuania               
upon recommendation of the Minister of Finance. The chief of  the               
State  Tax  Inspectorate  at the Ministry  of  Finance  shall  be               
accountable to the Minister of Finance.                                         
      2.  The  structure  of the State Tax  Inspectorate  at  the               
Ministry  of  Finance  shall be approved  by  the  chief  of  the               
Inspectorate on coordination with the Minister of Finance.                      
                                                                                
     Article 11. Local Tax Administrator's Work Organisation                    
       1.   Upon  recommendation  of  the  chief  of  State   Tax               
Inspectorate at the Ministry of Finance, the Minister of  Finance               
shall  establish the number of local state tax inspectorates,  as               
well as their zones of territorial activity.                                    
      2.  Chief  of the territorial state tax inspectorate  shall               
approve  the structure of the territorial state tax inspectorate,               
taking    into   account   the   methodical   instructions    and               
recommendations of the central tax administrator.                               
      3.  The chief of the State Tax Inspectorate at the Ministry               
of  Finance shall appoint and relieve of his duties the chief  of               
the   territorial  state  tax  inspectorate.  The  chief  of  the               
territorial  state tax inspectorate shall be held accountable  to               
the  chief  of  the  State Tax Inspectorate at  the  Ministry  of               
Finance.                                                                        
                                                                                
     Article 12. State Tax Inspectorate Employees                               
      1.  State  Tax Inspectorate employees shall be engaged  and               
dismissed  from work by the chief of the tax inspectorate,  which               
employs them.                                                                   
      2.  The  central tax administrator shall set  requirements,               
according  to  which  State Tax Inspectorate employees  shall  be               
selected and also the procedures according to which employees may               
be  appointed to higher level positions and their salaries may be               
increased. These requirements must be connected only with the tax               
inspectorate  employees' ability to complete work  in  accordance               
with approved job instructions and position occupied.                           
                                                                                
     Article 13. Work Compensation and Social Guarantees of State               
          Tax Inspectorate                                                      
       Laws   of   the  Republic  of  Lithuania  and  subordinate               
legislation  shall establish the State Tax Inspectorate  employee               
work and salary conditions and social guarantees.                               
                                                                                
     Article 14. Organisation of Information Supply to Taxpayers                
      1.  The central tax administrator shall organise supply  of               
information  for  taxpayers  on tax laws  and  other  legislation               
relevant  to  tax  questions  and  create  programs  to   educate               
taxpayers. The purpose of this work is to assist taxpayers in the               
observance of tax laws and subordinate legislation.                             
      2.  The  central tax administrator shall organise  taxpayer               
education  regarding tax law issues and other  legislation  which               
regulates tax payment procedure.                                                
                                                                                
      Article  15. Tax Administrator's Organisation  of  Employee               
          Training                                                              
      The  central  tax  administrator  shall  organise  training               
(qualification  improvement) of State Tax Inspectorate  employees               
in accordance with training programs prepared for that purpose.                 
                                                                                
                           Chapter IV                                           
           Rights and Obligations of Tax Administrator                          
                                                                                
     Article 16. Duties of Tax Administrator                                    
     1. The tax administrator shall:                                            
      1)  keep records of taxpayers' and other payments into  the               
state (municipal) budget;                                                       
       2)   control  computation  of  payments  into  the   state               
(municipal) budget, exact interest for late payment and penalties               
imposed in accordance with tax laws, and also refund overpayments               
and wrongly exacted taxes, interest and penalties;                              
      3)  implement  municipal decisions regarding  provision  of               
reliefs of taxes, collections and deductions into the budget;                   
      4)  apportion  taxes  and  other payments  into  state  and               
municipal budgets;                                                              
      5) organise accounting, valuation and sales of confiscated,               
ownerless,  state-inherited  property  and  wealth,  as  well  as               
property, wealth and treasures transferred and included into  the               
state's revenues;                                                               
       6)   publish  legislation  or  prepare  its   drafts   for               
implementation of tax laws with the authorisation of the  Seimas,               
the  Government  and the Ministry of Finance of the  Republic  of               
Lithuania;                                                                      
      7)  give  explanations to taxpayers regarding  tax  payment               
issues;                                                                         
     8) prepare and provide for the Minister of Finance drafts of               
tax  laws  and  decrees  of the Government  of  the  Republic  of               
Lithuania,  and  other  proposals concerning  taxation  procedure               
improvement;                                                                    
     9) conduct inquiry according to his competence;                            
     10) fulfil obligations prescribed by other laws.                           
      2.  The local tax administrator shall carry out the  duties               
prescribed  in  paragraphs 3 and 4 of part one of  this  Article,               
while  the  central  tax  administrator  shall  carry  out  those               
contained  in paragraphs 6 and 8. Both the local and central  tax               
administrators shall carry out the duties prescribed in  all  the               
other paragraphs.                                                               
                                                                                
     Article 17. Rights of Tax Administrator                                    
     1. Tax administrator's officers shall have the right to:                   
      1)  obtain from enterprises, institutions and organisations               
as  well  as other persons, including banks and other credit  and               
finance institutions, information required in the performance  of               
their  duties  and  copies of documents concerning  property  and               
income  of legal, natural persons, or persons without the  rights               
of a legal person under examination;                                            
     2) enter without prior notice, upon presentation of official               
certificate,  a  person's production premises  (including  rental               
premises)  or territory, in order to establish how the person  is               
fulfilling  his  tax liabilities and to verify the  material  and               
technical  resources used for activity and the finished products.               
The  tax  administrator's officer shall also have this  right  in               
instances  when  residential premises and  other  facilities  are               
employed  for  the  purpose of activity and  income  acquisition.               
Chiefs of enterprises, institutions and organisations as well  as               
natural   persons,  interfering  with  the  right  of   the   tax               
administrator's officer to avail himself of this right  shall  be               
held  liable in accordance with the procedure established by law.               
To enter, without prior notice, a taxpayer's territory, buildings               
and  facilities  (including rental premises) shall  be  permitted               
only during the taxpayer's work hours. A taxpayer's consent shall               
be required in other instances;                                                 
      3) take temporarily from the taxpayer and keep for a period               
of  up  to 30 days, documents necessary to establish the veracity               
of  tax computation having left a document receipt statement,  to               
seal  the  areas for safekeeping of documents, securities,  money               
and  material valuables, to make document copies or excerpts,  to               
mark   the  taxpayer's  documents  in  order  to  prevent   their               
falsification;                                                                  
      4) furnish the taxpayer with instructions the fulfilment of               
which  is  mandatory  regarding issues  of  tax  computation  and               
payment,  and other payments to the state (municipal) budget  and               
also on issues of record keeping;                                               
      5)  recover  without suit from individual  accounts  within               
banking  institutions  taxes not paid on time  and  interest  and               
penalties,  as  well as other sums belonging  to  the  budget  as               
provided for by laws;                                                           
     6) issue instructions to banking institutions to cease money               
disbursement  and  transfers from enterprise  accounts,  if  they               
failed  to furnish on time to the State Tax Inspectorate  returns               
and   other  budget  payment  computations  and  do  not   permit               
investigation  of  taxes, or if in the course  of  investigation,               
facts  of  income  concealment and incorrect tax computation  are               
uncovered;                                                                      
      7)  furnish  the  taxpayer with mandatory  instructions  on               
issues of tax computation and payment;                                          
      8) compile protocols of administrative violations of law in               
cases   which   according   to  law   are   attributed   to   the               
administrator's competence;                                                     
       9)  perform  personally  or  to  require  other  competent               
institutions  to  perform  check measurements,  stock  taking  of               
material valuables and other verification of facts measures,  and               
require that the books be kept properly;                                        
      10)  install  meters and measuring devices within  taxpayer               
storage   facilities,   production  storage   areas   and   other               
installations used for work; seal and stamp the taxpayer  storage               
facilities,  premises  and  equipment;  close  off  the  area  or               
sections thereof;                                                               
      11)  temporarily suspend the work of individuals,  if  they               
avoid  to  furnish  the  tax  administrator  with  the  documents               
required  in connection with tax computation and payment,  or  if               
some violations of tax laws outlined in Articles 47, 48 and 49 of               
this Law occur;                                                                 
      12)  obtain  from  the  taxpayer returns  and  explanations               
relevant to sources of property acquisition;                                    
      13) assign, in accordance with the procedure established by               
laws, administrative sanctions and penalties provided for by  tax               
laws and also calculate the amount of interest;                                 
       14)  address  the  heads  of  all  types  of  enterprises,               
institutions  and organisations concerning the circumstances  and               
conditions  interfering  with  the  tax  administrator's   proper               
performance  of duties. Enterprise heads and other officers  must               
investigate the tax administrator's directives and inform without               
delay  (no  later  than  on  the day  following  receipt  of  the               
directive) the administrator of the measures adopted;                           
      15)  impound taxpayer and tax withholding person's property               
and  bank  accounts,  if taxes have not been  paid  (transferred)               
according to the procedure established by the tax law;                          
      16) possess, carry and use a service firearm, in accordance               
with  the procedure established by the Government of the Republic               
of Lithuania.                                                                   
      2. The tax administrator shall possess the rights specified               
in  this Article also with respect to the person withholding  the               
tax.                                                                            
      3. The tax administrator's officer may avail himself of the               
rights  provided by other laws and legislation  as  well  as  the               
rights  provided by decrees of the Government of the Republic  of               
Lithuania to an officer of the tax administrator.                               
                                                                                
     Article 18. Recording of Tax Administrator and his Officer's               
          Actions                                                               
      In  implementing  the rights accorded him  by  law  and  in               
performance  of his duties, the tax administrator or his  officer               
shall  register performed actions through decisions, whose  forms               
(act,   certificate,   directive,  recommendation,   explanation,               
decision,   warning,  etc.)  and  filling  procedure   shall   be               
established by the central tax administrator.                                   
                                                                                
                                                                                
                            Chapter V                                           
              TAXPAYER AND TAX WITHHOLDER'S RIGHTS                              
                         AND OBLIGATIONS                                        
                                                                                
     Article 19. Payment of Taxes                                               
      1.  The taxpayer shall pay only the taxes prescribed by tax               
laws,  observing  the tax laws and also the tax  computation  and               
payment procedure established by this Law.                                      
     2. The tax withholder shall withhold the tax and transfer it               
in  accordance with the procedure established by laws  and  other               
standard acts.                                                                  
                                                                                
     Article 20. Accumulation and Furnishing of Information                     
     1. The taxpayer, tax withholder must keep books according to               
the  procedure  established by law, issue the required  documents               
and  furnish  other information, needed by the tax administrator,               
to  fill  in  and file a tax return or through some  other  means               
inform  the  tax  administrator  regarding  tax  computation  and               
payment.                                                                        
      2.  If  the taxpayer, the tax withholder does not have  the               
documents  (or  has lost them), required for the  computation  of               
tax,  they must prepare them within the period prescribed by  the               
tax administrator.                                                              
      3.  The  taxpayer, tax withholder must,  according  to  the               
established  procedure, furnish their address  (action  location)               
and  work  hours to the tax administrator, and in  the  event  of               
changes in the data inform the tax administrator within a  period               
comprising no more than 5 work days.                                            
                                                                                
     Article 21. Right To Information                                           
      The taxpayer, tax withholder, having submitted a request to               
the  tax  administrator, shall have the right to obtain  standard               
documents, as well as other information required to implement the               
tax law.                                                                        
                                                                                
      Article  22. Confidentiality of Information Concerning  the               
          Taxpayer                                                              
      1. Information concerning the taxpayer which is supplied to               
the  tax  administrator or his officer must be held in confidence               
and used solely for the purposes established by the tax law.                    
     2. The tax administrator's officer maintains confidentiality               
of information concerning the taxpayer also after terminating his               
work  contract with his employer, with the exception of instances               
provided for by this Law.                                                       
     3. Information concerning the taxpayer may be disseminated:                
      1) to another tax administrator or his officer, if that  is               
required in the administration of the same or other tax;                        
      2)  to  courts,  law enforcement and other institutions  in               
instances provided for by law;                                                  
       3)  on  the  basis  of  international  agreements  to  tax               
administrator of a foreign country based on a written request;                  
      4) when guilt of the taxpayer for violations of the tax law               
has  been  proven  or  when the taxpayer  has  not  registered  a               
complaint against the actions of the tax administrator within the               
established period of time and in accordance with the established               
procedure.  In this instance information concerning the  taxpayer               
may  be  released insofar as this concerns the violation  of  tax               
law;                                                                            
       5)   information  concerning  a  taxpayer  may   also   be               
disseminated  based  on  the presence of the  taxpayer's  written               
consent or request.                                                             
      4.  The  recipient  of the information in  accordance  with               
paragraphs 1, 2, and 3 of part three of this Article must keep it               
confidential.                                                                   
       5.   If  the  tax  administrator  has  disseminated  false               
information  about  the taxpayer in instances specified  in  part               
three  of this Article, he must correct the error as soon  as  he               
becomes aware of this fact.                                                     
      6. If the tax administrator disseminated information to the               
tax administrator of a foreign country, according to paragraph  3               
part three of this Article, the taxpayer must be advised of this.               
      7.  The  tax  administrator and also  any  person  who  was               
privileged  to  confidential information  concerning  a  taxpayer               
shall   be  held  responsible  for  the  dissemination  of   this               
information in accordance wih the procedure established by  laws,               
except  in instances when the laws permit dissemination  of  such               
information.                                                                    
     8. The requirements of this Article shall also be applied to               
the tax withholder.                                                             
                                                                                
                                                                                
                           Chapter VI                                           
         TAX COMPUTATION, PAYMENT, EXACTION, AND REFUND                         
                                                                                
     Article 23. Tax Return Requirements                                        
      1.  Every  tax return filed by the taxpayer  with  the  tax               
administrator  must  conform to the  established  form.  The  tax               
return  shall be filed at the prescribed time and only  with  the               
tax administrator for whom it is designated.                                    
      2.  The  requirements specified in part one of this Article               
shall  also  apply to the tax return which the person withholding               
the tax must file with the tax administrator.                                   
      3. The forms and filling in procedure of the tax return  or               
other  documents, indicating tax liability, shall be  established               
by the central tax administrator on the basis of tax laws.                      
                                                                                
     Article 24. Computation (Recomputation)Period                              
      1.  Unless otherwise prescribed by the tax law, tax may  be               
computed  or  recomputed  to cover a period  not  to  exceed  the               
preceding  five calendar years for which a tax return had  to  be               
filed with the tax administrator.                                               
      2. If, according to the tax law, there is no requirement to               
file  a  tax  return with the tax administrator the  tax  may  be               
computed  or  recomputed no later than during the course  of  the               
fifth  year  following the calendar year, during  which  the  tax               
should have been, or has been paid.                                             
      3.  If  the taxpayer fails to file a tax return or files  a               
faulty  tax return or otherwise avoids payment of tax and  unless               
the  tax  law  provides otherwise, the tax  may  be  computed  or               
recomputed  for  the period not exceeding the past  ten  calendar               
years, for which a tax return should have been filed with the tax               
administrator.  This regulation shall also apply  to  the  person               
withholding the tax.                                                            
                                                                                
     Article 25. Tax Reliefs                                                    
      Only an appropriate tax law regulating the procedure of tax               
computation  shall determine tax relief/s. Temporary tax  reliefs               
may  also be established by special laws passed by the Seimas  of               
the Republic of Lithuania.                                                      
                                                                                
     Article 26. Proof of Accuracy of Tax Computation                           
      1.  In instances where the taxpayer fails to agree with the               
tax sum computed by the tax administrator, he must prove that the               
calculated sum is incorrect.                                                    
     2. If the taxpayer fails to have the accounting documents in               
his  possession, totally fails to keep accounting  or  if  it  is               
established that the documents have been falsified, and  also  if               
he  fails  to  submit  to  the  tax  administrator  the  required               
information, the tax administrator shall have the right to impose               
taxes  on  the  taxpayer by applying indirect  methods.  In  this               
eventuality the taxpayer shall be required to prove that the  tax               
has been incorrectly calculated.                                                
     3. An indirect method of taxation involves regulations which               
are  established by the Government of the Republic  of  Lithuania               
and  ways of establishing a tax base in the eventuality when  the               
taxpayer and the tax withholder do not have accounting documents,               
do not keep the documents, has not all of the documents needed by               
the tax administrator, and also when accounting documents are not               
genuine or are falsified, or when due to other causes efforts  to               
establish a tax base in accordance with the procedure established               
by law prove unsuccessful.                                                      
       4.   If  a  great  disparity  or  inconsistency  with  the               
established norms exists between the taxed income, or the  income               
declared  by  the  taxpayer, or the income proven  through  other               
means  on  the one hand and the property acquired by the taxpayer               
or  other expenses incurred by him which are indicated by a large               
amount   of   consumption  elements  on  the   other,   the   tax               
administrator shall have the right to tax the taxpayer with  such               
an  established sum of income which according to his computations               
is  required to acquire such property or consumption elements. In               
this  case  it  is the taxpayer who must prove that  the  tax  is               
determined incorrectly.                                                         
      5.  The  consumption element signifies  the  sum  total  of               
material  and non-material goods suitable for short or  long-term               
consumption.                                                                    
      6. In cases when a taxpayer fails to file a tax return with               
the   tax   administrator  in  accordance  with   the   procedure               
established  by law, the tax administrator himself  shall  assess               
the  amount  of  tax  owed by the taxpayer. This  amount  of  tax               
liability shall be determined (assessed) in accordance  with  one               
of the methods cited below:                                                     
      1)  based on information concerning the taxpayer  that  the               
administrator possesses from earlier returns filed  with  him  by               
the  taxpayer  or other documents, or based on other  information               
obtained  from  individuals  involved  in  the  same  or  similar               
activity;                                                                       
      2)  based on every other piece of information which the tax               
administrator possesses concerning the taxpayer.                                
                                                                                
      Article  261. Filing of Data and Information with  the  Tax               
          Administrator                                                         
      1.  While settling mutual accounts and making cash payments               
for  goods  and  services  to foreign  entities  (except  natural               
persons),  enterprises,  institutions and  organisations  of  all               
types  which  have been registered in the Republic  of  Lithuania               
must  file  with the local tax administrator, in accordance  with               
the procedure established by the Ministry of Finance, data on the               
amount  in  excess of 10,000 Lt paid out per day to one  economic               
entity. If the amount is paid out to a foreign economic entity in               
foreign currency it shall be calculated according to the official               
litas  rate  of the day and the litas exchange rate announced  by               
the Bank of Lithuania.                                                          
      2.  The data specified in Par. 1 hereof shall be filed with               
the  tax  administrator  in  whose territory  of  activities  the               
economic entity that has received income is registered, within 10               
days after the close of the month when the amounts have been paid               
out.  Data on the amounts paid out to foreign entities  shall  be               
filed with the central tax administrator.                                       
     3. In case of failure to file with the tax administrator the               
data  specified in Par. 1 hereof, interest at the rate of 0.2  on               
the undeclared amount but not in excess of the triple amount paid               
out   shall   be  exacted  from  enterprises,  institutions   and               
organisations for each day that the data remains unfiled. Amounts               
of interest for failure to timely file the required data shall be               
transferred into the state budget.                                              
      4.  Commercial  banks must by the 5th day  of  every  month               
furnish  the  central tax administrator with information  on  all               
types  of accounts opened and closed by economic entities in  the               
previous month.                                                                 
     5. Furnishing of incorrect information concerning the opened               
accounts  or  failure  to  furnish  information  shall  make  the               
managers  of  commercial  banks liable  in  accordance  with  the               
procedure established by the Code of Administrative Violations of               
Law (Amended 13 June 1996).                                                     
                                                                                
     Article 27. Verification of Tax Computation and Payment                    
      1.  Having  completed verification, the tax administrator's               
officer/s shall draw up an act signed by the officer/s  who  have               
conducted  the tax verification, as well as by the  head  of  the               
verified  enterprise,  institution, organisation  and  the  chief               
finance officer (accountant) or natural person.                                 
     2. Refusal to sign the verification document (act) shall not               
exempt  the  taxpayer  from the payment  of  taxes,  interest  or               
penalties.                                                                      
      3.  Officers  of the tax administrator shall  independently               
select taxpayers subject to verification and determine the  scope               
and time of verification.                                                       
      4. The taxpayer and the person withholding the tax shall be               
obliged   to   provide  suitable  working  conditions   for   tax               
administrator's  officers, to furnish all documents  required  to               
carry out tax computation and correct payment verification.                     
                                                                                
     Article 28. Tax Distribution                                               
      1.  Taxes  and  other payments into the  state  (municipal)               
budget shall be distributed as prescribed in the Law on Budgeting               
of  the  Republic of Lithuania and tax laws. In  the  absence  of               
indication  as  to  where taxes or other sums  belonging  to  the               
budget  are  to  be accumulated they shall be included  into  the               
state budget.                                                                   
      2.  Income  from interest and penalties for  late  payment,               
underpayment  or total non payment of taxes shall be  accumulated               
in  like  fashion  as  taxes for the improper  payment  of  which               
interest or penalties had been computed.                                        
                                                                                
     Article 29. Tax Payment And Exaction                                       
     1. The tax law shall establish the tax payment period.                     
      2.  The  unpaid amounts of money, brought to  light  during               
verification by the tax administrator and the computed  penalties               
must  be  paid no later than within a period of 20 days from  the               
date the taxpayer had become aware of this.                                     
      3.  The statute of limitations shall not be applied to  the               
payment and exaction of computed tax. The above regulation  shall               
also apply with respect to imposed interest and penalties.                      
      4.  Longest  overdue taxes shall be paid  (exacted)  first,               
followed by penalties and last, by interest.                                    
                                                                                
     Article 30. Warning on Voluntary Payment of Taxes                          
       1.   Having   established  the  extent  of  a   taxpayer's               
indebtedness  and  availing himself of his  right  to  exact  the               
unpaid  tax,  as  well as other amounts related to  tax  payments               
(interest, penalties) by obligatory means, the tax administrator,               
prior to commencement of carrying out his obligation, shall  send               
the  taxpayer  a  warning urging him to pay  the  tax  and  other               
amounts related to improper payment of tax voluntarily.                         
      2.  The  warning urging voluntary payment of tax and  other               
amounts, connected to improper tax payment must contain:                        
     1) name of tax administrator;                                              
     2) name of taxpayer;                                                       
     3) date of issuance of warning to taxpayer;                                
     4) taxpayer's identification number;                                       
      5) payable amount of tax and amounts in connection with  it               
(interest, penalties);                                                          
     6) period during which the taxpayer must voluntarily pay the               
amounts indicated in the warning;                                               
     7) account into which the stated amounts must be paid;                     
      8)  warning  indicating  that,  in  the  event  the  amount               
specified in the warning is not paid voluntarily, these sums will               
be forcibly exacted.                                                            
      3.  If  there exists a danger that the taxpayer may conceal               
his  property,  sell  it  or lose it  by  other  means,  the  tax               
administrator's  officer  shall have the  right  to  impound  the               
taxpayer's  property at the same time as he presents the  warning               
to the taxpayer.                                                                
      4. The tax administrator shall set a period of no less than               
fifteen  and not to exceed thirty days from the date of issue  of               
warning, during which the sums indicated in the warning  must  be               
paid.                                                                           
      5.  In  the  event that the taxpayer refuses to accept  the               
warning,  or  he  is  not located at his registered  office,  the               
person  delivering the warning indicates this on the warning  and               
returns  it  to the tax administrator. The person delivering  the               
warning  and  a witness confirm the written entry concerning  the               
taxpayer's refusal to accept the warning and the confirmation  of               
his  motives  for refusal. The taxpayer's refusal to  accept  the               
warning shall be held tantamount to the warning having been given               
to  him.  The warning shall also be considered delivered  in  the               
event  that the taxpayer is not located at his registered  office               
at  the address indicated by him and during his working hours, on               
two occasions.                                                                  
                                                                                
      Article  31. Tax Administrator's Right To Exact Taxes  from               
          Taxpayer's Property                                                   
      1.  In  the event the taxpayer fails to pay taxes or  other               
amounts  in  connection with proper payment of  taxes  (interest,               
penalties) specified in the tax administrator's warning, the  tax               
administrator shall acquire the right to exact the tax  from  the               
taxpayer's  property towards which recovery may  be  directed  in               
accordance  with the Code of Civil Procedure of the  Republic  of               
Lithuania.                                                                      
      2.  The  right  to  exact taxes from the  property  of  the               
taxpayer shall be acquired on the day following the expiration of               
the   period   specified  in  the  warning  regarding   voluntary               
fulfilment of tax liabilities.                                                  
     3. The right to exact taxes from the taxpayer's assets shall               
disappear on the day the taxpayer pays the tax arrears as well as               
amounts in connection with it.                                                  
                                                                                
     Article 32. Impounding of Taxpayer Property                                
      Impounding  of  a  taxpayer property or  funds  constitutes               
distraint of property or funds and prohibition from disposing  of               
them,  regardless of in whose possession this property  or  funds               
were  kept on the day of impounding. This shall be made  official               
by an act of impounding.                                                        
                                                                                
     Article 33. Distraint of Taxpayer Property                                 
      1.  The  tax  administrator shall distrain  the  taxpayer's               
property  up  to the amount necessary to cover taxes and  amounts               
related  to them (interest, penalties) and to cover the  expenses               
connected with the enforcement of payment.                                      
     2. The tax administrator may seal the distrained articles.                 
      3.  Taxpayer's property shall be distrained in the presence               
of  a budgetary debt. The taxpayer's property shall be distrained               
in  the presence of the taxpayer himself, while in cases when the               
taxpayer  is  not  a  natural person,  in  the  presence  of  the               
taxpayer's  employees responsible for the correct filling  in  of               
the tax return.                                                                 
      4.  During the distrainment process the taxpayer shall have               
the  right  to inform the tax administrator as to which  articles               
the  enforcement of payment should be directed first of all.  The               
tax  administrator must satisfy such a declaration if  that  does               
not  violate the administrator's interests and does not interfere               
with exaction of taxes and related amounts.                                     
                                                                                
     Article 34. Contents of Act of Property Impounding                         
     1. An act of property impounding must indicate:                            
     1) date and place of the drawing up of the act;                            
      2) names of tax administrator's officer and also of persons               
who were participants in the drawing up of the act;                             
      3) the first and last names (titles) of tax administrator's               
officer and taxpayer;                                                           
     4) identification of every object described, its identifying               
characteristics (weight, size, degree of depreciation, and  other               
characteristics), value assessment of every object and the  total               
value of impounded property;                                                    
      5)  attestation  that all articles have been  placed  under               
seal, if that has been the case;                                                
      6)  list of all articles transferred over to another person               
for safekeeping;                                                                
      7)  person  to  whom  property has  been  handed  over  for               
safekeeping,  and his address, if the taxpayer  himself  has  not               
been assigned to protect his property;                                          
     8) entry indicating that the taxpayer and other persons have               
been  notified that the taxpayer or the property keeper have been               
explained  their  obligations and liability  in  connection  with               
safekeeping, as established in Article 4141 of the Code on  Civil               
Procedure of the Republic of Lithuania;                                         
     9) comments and statements of taxpayer and other individuals               
participating   in   property   distrainment,   and   also    tax               
administrator's directions concerning such.                                     
      2. As necessary, found articles against which under law  no               
payment  enforcement action may be directed,  as  well  as  other               
articles which shall not be impounded shall be listed in the  act               
of property impounding.                                                         
      3. An officer of the tax administrator, keeper of property,               
the taxpayer and other persons participating in the impounding of               
this property shall sign the property impounding act.                           
                                                                                
     Article 35. Assessment of Impounded Property                               
      The  officer  of  the tax administrator  shall  assess  the               
impounded  property  according  to  local  prices,  taking   into               
consideration  depreciation of the property. In  the  event  that               
assessment  of certain of the articles is difficult and  also  if               
the taxpayer is challenging the assessment carried out by the tax               
administrator's officer, the tax administrator shall call  in  an               
expert to decide the value of the property.                                     
                                                                                
     Article 36. Protection of Impounded Property                               
      1.  The  tax  administrator shall turn over in writing  the               
impounded property into the taxpayer's or another person's  care.               
They shall be presented a copy of the property impoundment act.                 
      2.  The keeper (if he happens to be someone other than  the               
taxpayer)   receives   compensation  in   accordance   with   the               
established  valuation. In addition, he is being compensated  for               
necessary expenses incurred in property safekeeping, at the  same               
time taking into account the benefit received by him.                           
      3.  The tax administrator shall turn over to custody of the               
banking  institution  serving him currency, securities,  precious               
metal  bars,  schlich, nuggets, manufactured and laboratory  type               
semi-manufactures and other handicrafted wares, diamonds and also               
jewellery and other everyday manufactured gold, silver,  platinum               
and  platinum metal variety articles, precious stones, pearls and               
the scrap thereof.                                                              
      4. Embezzlement, transfer or concealment of property handed               
over  for  custody, or destruction or damage thereof shall  incur               
criminal liability for the custodian.                                           
      5. The custodian shall be in every instance held liable  by               
way  of  his property for the loss, defficiency or damage of  the               
property handed over to him for custody.                                        
                                                                                
      Article  37. Enforcement of the Payment of Tax and  Related               
          Amounts                                                               
      1.  Having drawn up the act of property impoundment the tax               
administrator  shall  adopt a decision concerning  exactions  and               
hand   it   over  to  court  bailiffs  along  with  the  property               
impoundment  act for its enforcement according to  the  procedure               
established by law.                                                             
     2. The decision concerning exactions for the budget shall be               
handed  over  to court bailiffs in accordance with the  procedure               
established  by  the Code of Civil Procedure of the  Republic  of               
Lithuania. The decision concerning exactions for the budget shall               
be  handed  over to the court bailiffs only following termination               
of  the  process of appealing the tax administrator's actions  as               
provided  for by Chapter X of this Law, or in instances when  the               
time limit for submittal of complaint has been exceeded.                        
      3.  Every  individual  in  whose possession  the  impounded               
property of the taxpayer is held may not perform any actions with               
regard  to  the taxpayer's property (neither issue payments  from               
this  property,  nor  transfer such to  anyone  else),  with  the               
exception of carrying out directives of the tax administrator.                  
      4. The bank may not open a new account and may not make any               
disbursements from the impounded account for the individual whose               
account  at the bank has been impounded by the tax administrator,               
with  the  exception  of disbursements made  in  accordance  with               
directive  from  the tax administrator. Account impounding  shall               
not  constitute an obstacle to funds reaching (being added on to)               
the individual's account.                                                       
                                                                                
     Article 38. Tax Refund                                                     
      1.  The  amounts  of  tax which are  returned  by  the  tax               
administrator to the taxpayer shall be taken from the  budget  or               
budgets,  into  which they had been paid and in  the  proportions               
according to which they had been paid in.                                       
     2. Other amounts related to the tax refund shall be refunded               
according to the same procedure as the tax.                                     
      3.  A  request for refund of an overpayment in tax  may  be               
submitted within two calendar years following the year  in  which               
the  tax  was  paid,  unless  an  appropriate  tax  law  provides               
otherwise.                                                                      
      4.  The  request must be submitted in writing  to  the  tax               
administrator to whom the tax overpayment was made.  The  request               
shall state the amount of overpayment and basis for refund.                     
      5.  The  tax  administrator shall refund the  overpaid  tax               
amount to the taxpayer within 30 days following the receipt of  a               
written  request concerning the tax refund. The tax administrator               
who  fails  to  refund the tax overpayment within  the  specified               
period  shall  add interest to the taxpayer's account  until  the               
overpaid  tax  amount is refunded. The interest amount  shall  be               
equivalent to the amount of the penalty set for late tax  payment               
reduced by up to 15 points.                                                     
      6.  The tax administrator may, within a 30-day period  from               
the  day of receipt of the request, credit an overpayment of  tax               
against   any  other  tax  liability  (including  penalties   and               
interest),  even  though  this is not specified  in  the  written               
request  submitted  by  the taxpayer. The tax  administrator  who               
fails  to credit the overpaid amount of tax and apply it  against               
other  liability  with  respect to tax  (including  interest  and               
penalties) within the prescribed time limit shall asses  interest               
in  favour of the taxpayer in accordance with the same procedure,               
as  that  applied  for  untimely refund of overpayment.  The  tax               
administrator  shall have that right even in  the  absence  of  a               
written request of the taxpayer.                                                
      7. If the individual withholding the tax transfers too high               
a  tax amount into the state (municipal) budget, the overpaid tax               
amount  shall  not  bear interest, but the overpayment  shall  be               
refunded within a 30-day period from the receipt of request.                    
                                                                                
     Article 39. Interest                                                       
     1. Interest shall be imposed for late payment or transfer of               
declared  tax  to  state  or (municipal)  budget,  regardless  of               
reasons as a result of which the tax was not transferred  to  the               
state (municipal) budget on time.                                               
      2.  Calculation  of interest shall commence  from  the  day               
following the date when the tax was due to be paid or transferred               
to  the state (municipal) budget, and shall be terminated on  the               
day of payment of tax (transfer) inclusive.                                     
      3.  The  Minister of Finance shall establish the amount  of               
interest  for late payment of tax and the procedure according  to               
which  the  interest  shall be paid and calculated,  taking  into               
account  the  average interest rate of the last calendar  quarter               
paid  for  government bonds issued for a term not to  exceed  one               
year and increased by up to 10 points.                                          
      4.  From the taxpayer or individual withholding the tax who               
fails  to pay the interest according to the established procedure               
interest  shall  be  exacted according to the same  procedure  as               
unpaid taxes.                                                                   
      5.  Payment of interest shall not exempt a person from  the               
payment of tax.                                                                 
      6.  Interest shall be assessed and collected in  accordance               
with the procedure established by this Article for failure to pay               
within  the  set period of tax amounts additionally disclosed  by               
the  tax  administrator's officer/s and the penalties imposed  by               
such.                                                                           
                                                                                
     Article 40. Exception to Chapter VI                                        
      1.  Provisions  of this Chapter shall not  apply  to  those               
taxpayers  from whom the tax is withheld and paid into the  state               
(municipal) budget by a tax witholder.                                          
     2. If the tax withholder has incorrectly withheld and made a               
tax  payment to the state (municipal) budget, including  interest               
and  penalties,  these  due amounts shall be  withheld  from  the               
person  withholding the tax according to the procedure prescribed               
in this Chapter.                                                                
                                                                                
                           Chapter VII                                          
                     RECORDING OF TAXPAYERS                                     
                                                                                
     Article 41. Register of Taxpayers                                          
     1. A general register of taxpayers shall be compiled for the               
purpose of keeping a record of taxpayers.                                       
      2.  The tax administrator shall register all persons  whose               
registration is mandatory under Article 43 of this Law.                         
                                                                                
     Article 42. Registrars of Taxpayer Register                                
      1.  The  Minister of Finance shall be the  founder  of  the               
taxpayer  register  and  the  tax  administrator  shall  be   the               
registrar thereof.                                                              
      2. The central tax administrator shall keep the general tax               
register.                                                                       
      3. The local tax administrator shall register taxpayers and               
keep the registration documents of the territory.                               
     4. The taxpayer register must be managed in such a way as to               
be  co-ordinated  with  other  state registers  and  classifiers.               
Therefore the tax administrator shall cooperate with the  keepers               
of state registers and classifiers.                                             
                                                                                
     Article 43. Registration of Taxpayers and Tax Withholders                  
      1. A person who, according to the law on tax, is liable  to               
taxes,   must   register   with  the  corresponding   local   tax               
administrator as a taxpayer.                                                    
     2. Every natural person working under an employment contract               
shall  register  with  the  local tax administrator  through  his               
employer.                                                                       
     3. Every tax-withholding person must register with the local               
tax  administrator and submit a list of taxpayers  from  whom  he               
withholds  a  tax,  in accordance with the established  form  and               
procedure.                                                                      
                                                                                
     Article 44. Time Period for Registration of Taxpayers                      
     A person who is made liable to a tax under a law on tax must               
register  with the corresponding tax administrator no later  than               
within  a  period of 5 days from the imposition of the liability.               
Legal  registration of a person shall constitute  the  moment  of               
inception  of  liability and in the event that legal registration               
is not provided for by law, by the commencement of activities.                  
                                                                                
     Article 45. Tax Payer Identification Number                                
     1. Every taxpayer or tax withholder must possess a permanent               
identification number making it possible to identify the taxpayer               
or  the  tax  withholder, regardless of who shall administer  the               
tax.                                                                            
      2.  The Legal Unit Register Identification Code shall apply               
to  enterprises and organisations, while the Population  Register               
Personal Code shall apply to natural persons.                                   
      3.  A  temporary  taxpayer identification number  shall  be               
allocated for taxpayers who for some reason may not use the Legal               
Unit  Register  Identification Code or  the  Population  Register               
Personal  Code,  the procedure of application  whereof  shall  be               
established by registrar of the taxpayer register.                              
                                                                                
       Article  46.  Regulations  of  Taxpayer  Registration  and               
          Register Keeping Procedure                                            
       The   Minister   of   Finance  shall  establish   taxpayer               
registration regulations and procedure of register keeping,  upon               
recommendation of the central tax administrator.                                
                                                                                
                                                                                
                          Chapter VIII                                          
                       TAX LAW VIOLATIONS                                       
                                                                                
      Article  47. Failure to Meet a Tax Liability by  Reason  of               
          Negligence                                                            
      Failure  to  meet a tax liability by reason  of  negligence               
shall  be  deemed present in instances when a taxpayer or  a  tax               
withholder  pays  (transfers) into the state  (municipal)  budget               
less than 100%, but more than 85% of the tax imposed by law.                    
                                                                                
      Article  48. Failure to Meet a Tax Liability by  Reason  of               
          Gross Negligence                                                      
      Failure  to  meet  a  tax  liability  by  reason  of  gross               
negligence  shall be deemed present in instances when a  taxpayer               
or  tax  withholder  pays (transfers) into the state  (municipal)               
budget less than 85% of the tax which he had to pay (transfer) in               
accordance with the laws.                                                       
                                                                                
     Article 49. Persistent Tax Law Violations                                  
      1. Repeated, systematic or deliberate violation of tax laws               
shall be considered as a persistent tax law violation.                          
     2. A persistent tax law violation shall be deemed as such if               
:                                                                               
      1)  the  taxpayer or tax withholder committed  the  actions               
specified  in  Articles 47 and 48 of this Law, twice  within  the               
course of three calendar years;                                                 
       2)  the  taxpayer  or  tax  withholder  committed  actions               
specified in Articles 47 and 48 of this Law, three or more times,               
regardless of over what period of time this was accomplished;                   
      3)  the  person  is negligent in keeping the  books  of  an               
enterprise,  institution and organisation, if this  has  made  it               
totally  or  partly  impossible to establish the  results  of  an               
enterprise,   institution,   or   organisation's   activity   and               
commercial, economic, and financial condition or to evaluate  its               
property;                                                                       
      4) the person keeps books of an enterprise, institution  or               
organisation in a fraudulent manner, conceals, destroys or  loses               
accounting  documents,  if this has made  it  totally  or  partly               
impossible  to determine results of the enterprise,  institution,               
organisation's commercial, economic and financial condition or to               
evaluate its property.                                                          
      5)  the  person  records false information  concerning  his               
income  or the use thereof in the tax return filed with  the  tax               
administrator;                                                                  
      6)  the  person  fails to file a tax return  with  the  tax               
administrator  or files it belatedly, if he had  previously  been               
given an administrative penalty for an identical violation;                     
     7) the person fails to keep accounting documents;                          
      8)  the  person refuses an officer of the tax administrator               
access to accounting documents;                                                 
      9)  the person fails to appear before the tax administrator               
at the appointed time following receipt of a repeated notice from               
the tax administrator;                                                          
      10)  the  person  falsifies documents or submits  falsified               
documents to the tax administrator;                                             
      11)  the  person attempts to obstruct the  process  of  tax               
determination or collection;                                                    
     12) the person cooperates with other persons contributing to               
any of the actions listed herein;                                               
      13)  the person has failed to register as taxpayer  or  tax               
withholder;                                                                     
      14)  the  person has failed to inform the tax administrator               
concerning changes of his place of residence and work hours.                    
                                                                                
                                                                                
                           Chapter IX                                           
                LIABILITY FOR TAX LAW VIOLATIONS                                
                                                                                
     Article 50. Imposition of Penalties                                        
      1.  The tax administrator shall impose a penalty equivalent               
to  the  amount of money specified in the order, on  the  banking               
(credit) institution which fails to carry out the administrator's               
instruction to write off the sums of money without suit from  the               
account  of taxpayer or tax withholder, regardless of whether  or               
not  the  account is impounded. The imposed penalty  may  not  be               
larger  than  the  amount  of money  in  the  taxpayer's  or  tax               
withholder's  account  on  the day when  the  bank  received  the               
instruction  to  write  off the funds without  suit.  Payment  of               
penalty  shall not relieve the banking institution  of  complying               
with the tax administrator's instruction.                                       
      2.  In the event that the taxpayer fails to satisfy his tax               
liability  due to negligence (Article 47), he shall  be  given  a               
penalty equivalent to 50% of the unpaid (not transferred)  amount               
of money.                                                                       
      3.  In the event that the taxpayer fails to satisfy his tax               
liability due to gross negligence (Article 48), he shall be given               
a  penalty  equivalent  to 100% of the unpaid  (not  transferred)               
amount.                                                                         
      4. If the tax withholder violates the procedure established               
by  the  tax law on tax withholding and transfer into  the  state               
(municipal)  budget  (Article 47), he shall be  given  a  penalty               
equal  to  10% of the amount not withheld or transferred  to  the               
state  (municipal) budget according to the procedure  established               
by  law on tax, while for gross negligence (Article 48), he shall               
be  given  a  penalty equal to 50% of the amount not withheld  or               
transferred  to  the state (municipal) budget in accordance  with               
the procedure established by the law on tax.                                    
      5.  An  administrative or criminal action shall be  brought               
against persons who violate tax laws and commit actions specified               
in  Article  49  of  this  Law.  In cases  where  the  violations               
specified  in  Article 49 are committed by a legal  person  or  a               
person  without  the rights of a legal person, adminsitrative  or               
criminal action shall be brought against the employees or  owners               
of   the   economic  entity  who  are  responsible  for   correct               
computation and payment of tax into the state (municipal) budget.               
                                                                                
     Article 51. Responsibility of Tax Administrator                            
      1.  A disciplinary or criminal action shall be brought,  in               
accordance with the procedure established by law, against the tax               
administrator's officers who have violated the laws or they shall               
be held materially responsible.                                                 
      2.  Damages  incurred by taxpayers resulting  from  illegal               
actions  of  the  tax  administrator or  his  officers  shall  be               
compensated according to the procedure established by laws of the               
Republic of Lithuania.                                                          
                                                                                
     Article 52. Time Limit for Penalty Payments                                
      1.  Penalties imposed by the tax administrator for tax  law               
violations  shall be paid no later than within 20 days  from  the               
day  on  which the person was handed in the decision  on  penalty               
imposition. The local tax administrator shall have the  right  to               
extend, according to the established procedure, this deadline but               
for  no longer than 6 months, the central tax administrator - for               
no  longer  than  1 year, and the Government of the  Republic  of               
Lithuania - for up to two years.                                                
      2. A penalty which is not paid within the term indicated in               
part one hereof shall be exacted using the same procedure as that               
for unpaid tax.                                                                 
      3. According to time limits established by part one hereof,               
interest   shall  also  be  permitted  to  be  paid  in   several               
instalments, however only the interest that have been imposed  by               
the officer of the administrator in the course of examination.                  
      4.  If the sums which have been deferred in accordance with               
the  procedure established in parts one and three hereof are  not               
be  paid within the deferred period or only a portion of deferred               
amounts is paid, the unpaid amounts shall be indexed taking  into               
account the consolidated consumer price index. Indexing shall  be               
undertaken   only   if  during  the  period  of   deferment   the               
consolidated consumer price index is no smaller than 1.1.                       
                                                                                
      Article  53.  Revocation of Permit (License) to  Engage  in               
          Activities and Cancellation of Export and Import                      
          Operations                                                            
     1. Officers of the tax administrator may revoke the validity               
of  a  permit  (license) to engage in corresponding activity  and               
also may adopt a decision to suspend export and import operations               
of  an  individual, who has failed to register as a  taxpayer  in               
accordance with the established procedure, has failed to  file  a               
tax  return according to the procedure established by tax law and               
during  the established time limits or is any other way  avoiding               
to  pay  taxes,  interfering with the tax administrator's  proper               
performance  of duties and implementation of rights conferred  by               
law.                                                                            
      2.  Having received the tax administrator's instruction  in               
accordance with the procedure established in part one hereof,  an               
institution  must  carry it out without delay,  immediately  upon               
receipt of the instruction.                                                     
                                                                                
                                                                                
                            Chapter X                                           
                   TAX DISPUTES AND LITIGATION                                  
                                                                                
     Article 54. Tax Disputes                                                   
      1.  The  taxpayer  may  dispute every  action  of  the  tax               
administrator  or his officer regarding him and the  consequences               
of this action.                                                                 
      2.  The  local tax administrator, the central administrator               
and the court shall investigate tax disputes.                                   
      3.  The  taxpayer shall have the right of hearing at  every               
stage during a tax dispute investigation.                                       
     4. During every stage of a tax dispute investigation the tax               
administrator must endeavour to reach a mutual understanding with               
the taxpayer concerning identical application of the tax law.                   
      5.  Tax disputes between the tax administrator and the  tax               
withholding person shall be investigated in accordance  with  the               
same procedure as tax disputes between the tax administrator  and               
the taxpayer.                                                                   
                                                                                
     Article 55. Filing of Complaints with the Tax Administrator                
      1.  The  local  tax  administrator shall  examine  the  tax               
disputes  which arise directly between the taxpayer and  the  tax               
administrator's officer conducting the inspection in keeping with               
tax  laws and other laws as well as subordinate legislation based               
on such.                                                                        
      2.  A  taxpayer's  complaint shall be  accepted  solely  in               
instances when:                                                                 
      1) it is filed in writing within 20 days from receipt of  a               
written decision from the tax administrator's officer;                          
      2)  it is filed with the tax administrator, whose officer's               
actions are the basis for the complaint;                                        
      3) the taxpayer's name, surname, (title), address, date  of               
filing and signature is stated in the complaint;                                
     4) actions subject to complaint are indicated.                             
      3.  Filing  of complaint shall stop implementation  of  tax               
administrator's  instruction  but  shall  not  bar  issuance   of               
impounding  order of taxpayer's property or serve  as  basis  for               
cancellation of property impounding.                                            
      4. The tax administrator who is investigating the complaint               
must adopt a decision within 30 days of receipt of complaint.                   
      5. The tax administrator who is investigating the complaint               
shall according to his competence:                                              
     1) confirm the decision of the tax administrator's officer;                
     2) annul the decision of the tax administrator's officer;                  
      3)  partly  confirm  or  annul  the  decision  of  the  tax               
administrator's officer;                                                        
     4) assign to perform a repeated investigation.                             
                                                                                
      Article  56.  Investigation and Filing of Complaint  before               
          Central Tax Administrator                                             
     1. The central tax administrator shall investigate those tax               
complaints,   which   were  investigated   by   the   local   tax               
administrator, or if the local tax administrator fails  to  adopt               
any  decisions within the time limit specified in  part  four  of               
Article 55.                                                                     
      2.  If  the  complaint is lodged as a result  of  decisions               
adopted by the central tax administrator, the first part of  this               
Article shall not be applied.                                                   
      3. The complaint filed before the central tax administrator               
shall be investigated only if :                                                 
      1)  submitted within 20 days following receipt of local tax               
administrator's   decision  regarding   complaint   investigation               
results  or because the time period during which such a  decision               
should have been adopted, has expired;                                          
      2)  submitted  for  decision by  tax  administrator  (  his               
officers) within 20 days following the day of receipt of decision               
subject to complaint;                                                           
     3) filed before the central tax administrator;                             
      4)  the  name,  surname (title), address, filing  date  and               
signature of taxpayer are stated in the complaint;                              
     5) actions subject to complaint are specified.                             
       4.   Filing   of  a  complaint  before  the  central   tax               
administrator  shall  suspend  the implementation  of  local  tax               
administrator's decision, however, it shall not bar the  decision               
to  impound the taxpayer's property or be perceived as  basis  to               
annul impounding of property.                                                   
      5.  The  central  tax administrator must adopt  a  decision               
regarding the complaint within 30 days from the day of filing  of               
the  complaint. This time limit may be extended to  60  days  per               
central tax administrator's decision, if additional investigation               
is  required for the examination of the complaint. The individual               
who filed the complaint must be informed of this in writing.                    
      6.  The central tax administrator shall in accordance  with               
his competence:                                                                 
       1)   approve  the  decision  of  officers  of  local   tax               
administrator  or central tax administrator which is  subject  to               
the taxpayer's complaint;                                                       
     2) annul the decision of officers of local tax administrator               
or   of  central  tax  administrator  which  is  subject  to  the               
taxpayer's complaint;                                                           
     3) partly approve or annul the decision of officers of local               
tax  administrator or central tax administrator which is  subject               
to the taxpayer's complaint;                                                    
      4) issue instruction for local tax administrator to discuss               
anew  the  decision  subject to complaint  and  to  adopt  a  new               
decision.                                                                       
      7. In investigating the local tax administrator's decision,               
or  one  directly  approved by his own officer, the  central  tax               
administrator  shall have the right to examine all  questions  in               
connection with taxation of the taxpayer and shall have the right               
to alter an already adopted decision.                                           
                                                                                
     Article 57. Formulation of Decision Regarding Complaint                    
      1.  The  tax administrator, having examined the  complaint,               
shall without delay inform the taxpayer in writing concerning the               
adopted  decision and indicating the reasons for the adoption  of               
the decision.                                                                   
      2.  The right of the taxpayer to file a complaint regarding               
the adopted decision shall be explained in the decision.                        
      3.  The  decision adopted by the central tax  administrator               
must  be implemented by the parties involved in the dispute,  and               
also  by  the  individuals connected with the dispute,  following               
expiration  of the time limit for complaint established  in  part               
three of Article 58.                                                            
      4.  Only  the  exaction, in accordance  with  the  decision               
adopted  by the central tax administrator, of disputed  penalties               
and  interest  shall be suspended during the interval  while  the               
taxpayer  is  filing a complaint in court regarding the  decision               
adopted by the central tax administrator.                                       
                                                                                
      Article  58.  Filing  in  Court of  Complaint  against  Tax               
          Administrator's Decision                                              
      1. Having filed a complaint in court against the actions of               
an officer of the central tax administrator who had conducted the               
investigation  and disagreeing with the decision of  the  central               
tax administrator (or if the central tax administrator failed  to               
adopt such a decision within the period established by law),  the               
taxpayer  shall have the right to file a court complaint  against               
the  central tax administrator's decision (or if the central  tax               
administrator  has failed to adopt such a decision,  against  the               
actions of the officer of the central administrator).                           
      2.  Having  filed  with  the central  tax  administrator  a               
complaint   against  a  decision  adopted  by   the   local   tax               
administrator  and disagreeing with the decision adopted  by  the               
central  tax  administrator, or if the central tax  administrator               
failed  to adopt a decision within the time limit established  by               
law, the taxpayer shall file a complaint before court against the               
decision adopted by the local tax administrator.                                
      3.  The taxpayer must file a complaint no later than within               
20  days  from  the receipt of the decision of  the  central  tax               
administrator, and in the absence of decision approval, within 20               
days  from  the  other day on which the central tax administrator               
was to have approved the decision.                                              
      4.  The  tax administrator and the taxpayer shall have  the               
right  to acquaint the public through use of the mass media  with               
court decisions regarding tax cases.                                            
                                                                                
                           Chapter XI                                           
               RECOGNITION OF DATES AND DOCUMENTS                               
                                                                                
     Article 59. Setting of Time Limit                                          
     1. The date which the tax administrator marks as the date of               
receipt  of documents, shall be recognised as the date  on  which               
the documents were submitted to the tax administrator.                          
      2. The date which the taxpayer marks as the date of receipt               
of  documents, shall be recognised as the date of presentation of               
documents to the taxpayer.                                                      
      3.  If  the  tax  administrator or the  taxpayer  post  the               
documents,  the receipt of document date shall be  determined  by               
the  official  postmark, stamped by a post  office,  having  that               
right.                                                                          
      4.  Under  circumstances where no evidence exists regarding               
receipt of document by post, the dates shall be determined  based               
upon  the  date  they were sent as confirmed by an official  post               
office stamp.                                                                   
      5.  The date establishment regulations enumerated in  pars.               
one,  two  and three of this Article shall apply in investigating               
whether  or  not  the  terms established by tax  laws  have  been               
violated.                                                                       
      6.  If the last day for completing an action, according  to               
law, is not a work day for the tax administrator, the action must               
be completed on the day following the non-work day.                             
                                                                                
     Article 60. Recognition of the Document                                    
      Terms  of  the  statutory limitations shall be  established               
solely  according  to  original  documents  which  have  all  the               
mandatory requisites providing the document with legal power.                   
                                                                                
      I  promulgate this Law passed by the Seimas of the Republic               
of Lithuania.                                                                   
                                                                                
                                                                                
Algirdas Brazauskas                                                             
President of the Republic                                                       
                                                                                
Vilnius                                                                         
June 28, 1995                                                                   
No. I-974                                                                       
(As amended by 13 June 1996)