Lithuania launches Pilot Program for Real-Time VAT Return Assessments 

| Image Credits: Lithuania´s State Tax Inspectorate (VMI)

Starting in September, Lithuania´s State Tax Inspectorate (VMI) is piloting a real-time VAT return assessment process.

The initial phase involves comparing customer VAT declarations with their sales data recorded in Lithuania’s i.SAF invoicing subsystem. During Pilot program, data won´t be matched with that of counterparties. Initially, only domestic sales in Lithuania are in scope of the program. Any notes on discrepancies will be sent to the taxpayer via EDS message by the authorities.

Lithuanian tax authorities expect that Real-time assessment will allow taxpayers to identify and correct VAT declaration discrepancies before VMI initiates control actions. Faster corrections will help avoid interest penalties for late payments. In 2023, taxpayers corrected €136 million in VAT declarations due to i.SAF inconsistencies and declared an additional €34 million in taxes.

NOTIFICATION AND CORRECTION TIMELINE:

• Customers will be notified of any identified discrepancies within 2 business days through the Electronic Declaration System (EDS).

• Discrepancies must be corrected by the VAT declaration deadline or no later than ten (10) days after the deadline. If discrepancy is justified and does not need to be corrected, taxpayer should add an Explanation next to return in EDS system.

VAT RETURN PROCESS:

• The VAT return and payment deadline remains unchanged – declarations must be submitted by the 25th of each month.

• Refundable and payable VAT amounts will be visible in My VMI (Mano VMI) once the return is submitted, even while the assessment is ongoing.

• If discrepancies are found within two (2) days of the submission, the declaration will still be considered submitted on time.

PILOT PROGRAM DETAILS:

• The pilot phase includes the assessment of only one risk indicator, with a tolerance limit for discrepancies.

• Initially, only significant discrepancies will be flagged, with the threshold expected to be lowered over time.

SOURCE/RECOMMENDED READ:

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