Declaration of taxes
The principles of calculation and declaration of taxes will not change (from 1 January 2015), except for the fact that the amounts indicated in litas in all tax laws will be changed into euro (not necessarily according to the fixed rate). For this purpose, relevant changes will be made to tax laws and tax return forms and the provisions of the tax return completion procedure in 2015.
The Law of the Republic of Lithuania on the Euro Adoption provides that in tax returns monetary values are indicated in the currency, which was a legal tender in the State at the end of the tax period for which the tax return is submitted. Thus, monetary values in all tax returns submitted for the tax period, which will start on the euro adoption date (1 January 2015), will have to be indicated in euro. And respectively, monetary values in tax returns submitted for the tax period, which started and ended before the euro adoption date (31 December 2014 inclusive), are indicated in litas.
The same provisions are applied to revised tax returns for the previous tax periods.
This means that, when declaring income for the 2014 tax period, residents and those who are engaged in individual activities will indicate all data in litas in Annual Income Tax Return GPM 308 forms, and income tax amounts payable by residents to the budget or refundable to them from the budget will be converted into euro by the tax administrator. The tax administrator will convert the final result of the tax liabilities indicated in the return (payable or refundable amounts) into euro and tax amounts to be recovered from them and related to them, i.e. the tax liabilities to be fulfilled after the euro adoption date.
Respectively, all legal entities, the tax period of which coincides with the calendar year, will calculate and declare all taxes (corporate tax, individuals’ income tax, value added tax, etc.) for 2014 in litas, and if the payment deadline is set for the next tax period, the tax amounts indicated in tax returns will be converted into euro by the tax administrator.
Both individuals and legal entities will calculate, declare and pay taxes in euro from the euro adoption date, i.e. from the tax period, which will start on 1 January 2015.
It is important that tax payers, who will issue invoices or VAT invoices after 1 January 2015 and which will formalize the supply of goods or the provision of services both before and after the euro adoption date, will have to indicate all data in euro. Respectively, after 1 January 2015, tax payers, when issuing credit or debit VAT invoices which will revise the VAT invoices issued before the euro adoption date (i.e. before 31 December 2014), will have to indicate all data in euro.
Payment of taxes
From 2015 taxes will be paid to the budget in euro. All the outstanding tax liabilities of tax payers and the amounts overpaid before the euro adoption date will be converted to the euro by applying the irrevocably fixed conversion rate as of the euro adoption date. The amounts in tax payers’ applications to refund (enter) the overpaid tax amount (difference) for the period until the euro adoption date will have to be indicated in euro.