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)