could be revised more than once in three years, as it has been earlier. The target period for the use of intangible assets could be set up to 20†years (earlier the maximum period was 10†years).

      EñCOMMERCE Amendments to the Law

      on Firmsí Names Letters or numerals, which cannot be understood as words,

      could be used in a firmís name according to the amendments of the Law on Firmsí Names, which have entered into force from 10†April 2002. However,

      On 10 April 2002 the Minister of Economy issued the Regulation for the Internal Market on Rendering of Certain Information Society Services, in Particular

      Electronic Commerce. It was drafted in accordance with Directive 2000/31/EC on

      Certain Legal Aspects of Information

      Society Services, in Particular Electronic Commerce, in the Internal Market

      (Directive on Electronic Commerce) of the European Parliament and Council of 8 June 2000.

      The regulation stipulates the information to be provided by the provider of services to the receiver. Apart from other general information, the provider of services must indicate the price of the information society services, indicating whether the payable taxes and delivery costs are included. The provider of services inter

      alia must indicate before the tender of an order:

      (1)†the sequence of operation in order to conclude the agreement;

      (2)†whether the provider of services

      will register and preserve the agreement and whether it is possible to make familiar with it;

      (3)†means for determining and correction of the errors of entry before submitting the order;

      (4)†the languages, in which the agreement will be concluded;

      (5)†the codes of proprietors and the ways to reach them.

      The provider of services shall be also obligated:

      (1)†to confirm the receipt of the order

      submitted immediately;

      (2)†toprovide possibility to the service

      receiver to correct errors inthe order prior to delivering it.These principles shall not applyto agreements concluded via

      electronic mail. The order andthe receipt confirmation of theorder are considered as receivedwhen respective party of an

      agreement is able to reach them.it is required that the letters ornumerals should be consideredas a symbolic name, should beunderstood as a firmís nameand should not mislead the

      public.Value-added tax From 2 April 2002 enterprises of free territories of free economic zones shall not calculate

      and pay VAT to the budget. Excise duty

      From 17 April 2002, enterprises residing in free economic zones are obliged to pay the excise duty. The same regulation

      will remain after coming into force of a new edition.

      On 1 April 2002 a new editionof the Law on the Prevention of Money Laundering entered into force. The list of the state institutions responsible for the implementation of preventive measures

      against money laundering was supplemented with the State Insurance Supervisory Authority under the Ministry of Finance and the Securities Commission. Credit and financial institutions, and notaries shall have to

      report, to the extent stipulated by the law, on any individual or legal entity:

      l if there is suspicion that certain transaction is connected with money laundering according to the criteria of suspicious transactions set by the Bank of

      Lithuania and the Government;

      l if the value of a single transaction or several consecutive transactions exceeds LTL†50,000 or its equivalent in a foreign currency;

      l before opening an account, receiving deposit, rendering services of safekeeping of valuables and while concluding other agreements with clients, when an amount exceeds LTL†50,000;

      l in case of other circumstances set in the law.

      The law defines a credit institution as a bank, credit union and other institution operating under the licence of the

      Bank of Lithuania, and a division (branch) of a foreign credit institution operating in Lithuania. Pursuant to the law, insurance companies, insurance brokers, investment companies, holdings and depositories, stockbrokers, post offices, companies organizing gaming, pawnshops are considered as

      financial institutions. In cases listed hereinabove, credit and financial institutions and notaries are obliged to report the data about entities and transactions to a newly established

      institution ñ the Financial Crime Investigation Service ñ immediately,

      but no later than seven (in some cases ñ three) days from the date of the transaction. A credit or financial institution

      shall have to report to the Financial Crime Investigation Service the information about the identity of a customer ñ foreign entity (branch or representative office) and the information

      about the transaction, if a single transaction or several connected monetary transactions, in which the customerñ a foreign entity (branch or representative office) is engaged, involve a sum in excess of LTL†50,000 or its equivalent in a foreign currency, even if the customerís activities involve large-scale continuous and regular monetary transactions. What is new, is that such information shall be also reported if

      a customer (local or foreign) is engaged in organising and exercising gaming.

      A single natural or legal person is no longer prohibited from carrying out from Lithuania a sum of cash in excess of

      LTL†500,000 or its equivalent in a foreign currency.

      The new Law on Value-Added Tax (hereinafter ñ VAT) is harmonised

      with the provisions of the Sixth Council Directive of the European Union of 17 May 1977, and shall come into force

      on 1 July 2002, subject to certain

      reservations. According to this law, VAT

      shall apply to the goods and services provided for a consideration of money on the territory of Lithuania, when such

      goods and services are provided by a taxable person who carries out its business activities. A transaction of a natural person, which is not related to the business activities of the natural

      person, shall not be subject to VAT.

      The main novelties of the law are as follows: l books, newspapers and magazines, certain tourist services,

      certain meat products will be subject to a reduced 5-percent VAT rate from 1 January 2003. Meanwhile, medicines and pharmaceuticals will be subject

      to the same reduced VAT rate only from the beginning of the year 2004, and eco-friendly products ñ from the beginning

      of the year 2006;

      l purchase or import VAT will not be deducted for motor vehicles, except for those indicated in the new law;

      l taxable foreign residents will be able to obtain a refund of VAT paid in Lithuania, if they are residents of the countries where VAT can be refunded to taxable Lithuanian residents;

      l tax authorities shall have the right to adjust contract prices when such prices diverge from the actual market prices;

      l in certain cases (when registering

      an entity as a payer of VAT or when a payer of VAT intends to apply zero VAT rate for exporting goods and then to refund the paid VAT, etc.), officials of the

      State Tax Inspectorate shall have the right to request the entity to provide them with the guaranty bond of a bank or insurance company, issued in order to secure proper execution of the tax duties

      of the payer of VAT.

      more than 50†% of the shares of a foreign unit, which is controlled by the Lithuanian Unit (hereinafter ñ the Foreign

      Unit); or (b) together with related persons

      holds more than 50†% of the shares of a Foreign Unit, however, its own holding is not less than 10†% of the shares of

      the Foreign Unit. According to the order, positive income shall be defined as

      all or part of the income received during the taxable period of the Foreign Unit, which is included in the income of the Lithuanian Unit pro rata to the holding

      (shares, votes or other rights) of the Lithuanian Unit. It is noteworthy that the order is aimed at only the following Foreign Units: (a) registered with the states (zones) not included in the list

      of the states (zones) exempt from article 39 of the Law on Taxes on Profits of the Republic of Lithuania; or (b) whose business activity is included in the list of foreign business activities to which Article

      39 of the Law on Taxes on Profits of the Republic of Lithuania shall apply.

      In case the Lithuanian Unit controls more than one Foreign Unit, positive income of each controlled Foreign Unit must be calculated separately.

      Positive income shall be calculated

      in the national currency ñ litas in accordance with the official exchange rate of litas and a respective foreign currency on the last day of the taxable

      period. Positive income shall be included in the income of the Lithuanian Unit pro rata to the holding (shares, votes or other rights) of the Lithuanian Unit on the last day of respective taxing period.

      The order also provides for certain types of income that cannot be included in positive income.

      FORESTA BLG is not responsible for any actions (or lack thereof) taken as a result

      of relying on or in any way using information contained in this News Letter.

      Information is of a general nature only.

      For further information please contact Mr Tomas Saulenas at +370 5 212 4564 or via e-mail TS@foresta.lt

      VARIOUS TAX LAW

      According to the amendments, which have entered into force on 18 April 2002, an enterprise is allowed to set the yearly depreciation rate of the long-term intangible and tangible assets without consideration to the maximum economic rates of the depreciation of long-term intangible and tangible assets, which have been approved by the Ministry of Economy and the Ministry

      of Finance. However, these maximum economic rates apply to the assets acquired before the Law on Taxes on Profits came into force. The yearly depreciation rate of the long-term tangible assets, beneficial service period

      and liquidati.

      On 15 April 2002 the State Tax Inspectorate approved the Rules on Registration with the State Tax Inspectorate of the Tickets and Blanks of Accounting Documents of Payments in Cash (hereinafter ñ the Rules). The

      Rules establish the procedure for registration with territorial departments

      of the State Tax Inspectorate of the aforesaid documents used by legal entities (companies, organisations and

      natural persons).

      The Rules enumerate the types of blanks and tickets that shall be registered with the territorial departments of the State Tax Inspectorate (cash receipts; theatre

      and cinema tickets and tickets of other events, etc.). It must be noted that blanks and tickets shall be registered with the territorial department of the State Tax Inspectorate located on the territory

      where the legal entity has been registered as a taxpayer. The Rules also list documents that should be submitted

      to the territorial department of the State Tax Inspectorate for the registration of blanks and tickets.

      Pursuant to the new Law on Taxes on Profits, on 12 April 2002 the Government of the Republic of Lithuania passed

      the Order on Approval of the Procedure for Calculation of Positive Income, its Inclusion in the Income of the Controlling

      Lithuanian Taxable Unit, and Types of Income Excluded from Positive Income.

      According to the Order, positive income shall be included in the income of a Lithuanian controlling taxable unit

      (hereinafter ñ the Lithuanian Unit) in the following cases: (a) when the Lithuanian Unit directly or indirectly holds