VAT drawback in Lithuania
In the chapter XIII of the Lithuanian Law about VAT of 2002 (amended on 15 January 2004, clause IX-1960) the possibility of VAT drawback for foreign companies was created.
The Article 116 provides details about it and also establishes that foreign persons from the member states of the EU with the tax duty can claim for the VAT drawback after following a certain procedure.
We can consider as being able to be refund only VAT that is included among following conditions (article 118):
- The Import Levy when the products are owned by a foreign tax payer and a Lithuanian payer of VAT do not have any rights to this kind of deduction of VAT;
- VAT paid by a foreign legal person (with a VAT tax duty) for the products and services and acquired in Lithuania. Such products and services are for example hotel accommodation, driving fuel, charges for participation at conferences and trade fairs and other products and services.
VAT is generally refunded on products and services that are in immediate connection with business activity of an applicant and on the common right of deduction of the advance payment tax.
Paid VAT could not be refunded on these required goods and services:
- Expenses at the restaurant, Catering, Banquet and other alimentation
- Bookings and vouchers for private consumption
- Payment for motor vehicles
- PR expenses such as advertising expenses, advertising material or mail-order paper
- Car hire expenses and Taxi
- Expenses for self accommodation and accommodation of business partners