Navigating VAT rules in the European Union can be a challenge for small businesses, but there’s good news! Lithuania’s State Tax Inspectorate (STI) has rolled out a process that allows Lithuanian small businesses to apply for a VAT exemption in other EU Member States. This means eligible Lithuanian businesses can now operate across borders with reduced tax burdens, making expansion easier and more cost-effective.
What Does This Mean for Lithuanian Small Businesses?
If you run a small business in Lithuania, you may be eligible for a special VAT exemption when selling goods or services in other EU countries. This applies to businesses that:
- Do not exceed the VAT registration threshold in the selected EU Member States.
- Have a total annual turnover across the EU (including Lithuania) of less than €100,000.
Once approved, businesses receive a unique VAT identification code marked with “EX.” This code confirms eligibility for the VAT exemption and simplifies tax compliance across multiple countries.
How to Apply for the VAT Exemption
Applying for the VAT exemption is now a straightforward process. Lithuanian businesses can submit their applications through the STI’s SMS system. Here’s how:
- Log in to the STI SMS system via my STI or at www.vmi.lt/svs.
- If logging in for the first time, grant permission for yourself or authorized persons to use the system.
- Select the business entity you represent.
- Go to Application > Fill in the application.
- Submit your request for the special VAT code (“EX”).
Once processed, businesses will receive their VAT identification number, allowing them to take advantage of the VAT exemption in participating EU countries.
Why This Matters
The EU’s new VAT directive aims to create a more business-friendly environment by reducing the tax burden on small enterprises. While Lithuania has not yet formally amended its VAT laws, the government has proactively launched this process to help Lithuanian businesses access the benefits immediately.
According to Rasa Virvilienė, Head of the Legal Department of the STI: “Understanding the importance of this directive for small businesses, we have made every effort to create suitable conditions as soon as possible.”
Where to Get Help
For more details, Lithuanian small business owners can:
- Visit the STI website for the latest guidelines and FAQs.
- Call the STI support line at +370 5 260 5060.
- Book an appointment for in-person assistance at customer service centers.
Final Thoughts
This VAT exemption is a game-changer for Lithuanian small businesses looking to expand within the EU. By simplifying tax requirements, it enables entrepreneurs to focus on growth without getting bogged down in complex tax regulations. If your business meets the criteria, applying for the exemption now can help you save costs and operate more smoothly across borders.
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