No. 4, 2013
CENTRE PLUS NEWS STATE TAX INSPECTORATE
S
tate Tax Inspectorate (hereinafter - STI) is the authority responsible for tax administration.The main objectives of the STI are as follows: to help taxpayers and tax withholding individuals to exercise their rights and responsibilities, to enforce tax laws and ensure the payment of taxes to the budget. STI provides public and administrative services such as registration of taxpayers, income-tax returns administration, the education and counseling of taxpayers, tax rebate and set-off, arrears management, issuance of documents to tax payers, etc The main taxes paid by individuals living in Lithuania are these: income tax of physical persons, mandatory health insurance contributions,social insurance contributions.If you are employed, these taxes are withheld from your wage and paid by the employer. These fees are also paid in the royalty agreements. Usually they are also withheld and paid by the employer according to the agreed payment.
If you want to establish business in Lithuania, you shall be aware that the main taxes in business are as follows: 1)Personal income tax (employment related taxes) (PIT); 2)Profits tax (Joint Stock Company, Close corporation, Sole proprietorship, Small partnership, partnerships, etc.); 3)Value-added tax (VAT) (paid by all companies registered as VAT payers);
4)Companies and organizations` real estate tax (companies pay, when they own registered real property); 5)Contributions to the Guarantee Fund (paid by all companies from the part of wage fund); 6)State social insurance contributions; 7)Excise duties.All the above tax rates vary and are paid at different rates listed below: 1)PIT - 15% income tax rate. 2)Profits tax-15%.
Centre Plius News No.4, 2013
3)VAT - 21%. It is applicable for selling and buying goods and services from their purchase price or production cost. 4)Real estate tax - from 0.3 % to 3 % (from the 1st of January, 2013). Tax assessment is calculated from the average real estate market value determined by the Centre of Registers and applying the mass real estate valuation method with certain exceptions. 5)Contributions to the Guarantee Fund - 0.2 % (It is calculated from all kinds of benefits to employed persons from which the state social insurance contributions are calculated and is paid from the date, when an employer begins to count the salary for employee). 6)State social insurance contributions (the contributions for separate insured groups are different. Detailed information about applied taxes:
http://www.sodra.lt/index. php?page_vers=2&cid=23356 ) ;
These taxes have to be paid by warehouse keepers of taxable goods, registered or non-registered traders, importers, and others required by law. More details on the application of taxes: http://www. vmi.lt/lt/?itemId=10830919 ).
For tax purposes and property declaration you should go
to the State Tax Inspectorate in the place of your residence. The addresses of STI departments could be found on website: http://www.vmi. lt/cms/aptarnavimo-skyriai . You can also call to Tax Information Centre on short phone number 1882 (overseas phone number +370 5 2553190, for subscribers of other fixed network operators – 8 700 55882). Calling on short number you can find out: how to fill the annual or interim annual personal income tax and the individual (family) wealth declaration,
through the e-declaration system, the information about personal income tax calculation and payment issues, information about value added tax, profits tax, real estate tax issues,information on tax administration and other general information (phone numbers, working hours, tax procedures, etc.). Information is provided in Lithuanian, English and Russian languages. Also, for business establishment and tax administration issues you can contact the specialist on business issues of Consultation and Information Center Plus. You can register how to fill value-added tax for consultation by e-mail: declaration, advanced and the centre@tja.lt or by phone: annual profit tax declaration, how to send these declarations +370 605 77 245 / (8-5) 261-74-82.
Centre Plius News No.4, 2013
TAX EXECUTIVE SERVICES (State Tax Inspectorate) Usually the third-country nationals who have started and are developing their own businesses in Lithuania have to turn to the State Tax Inspectorate (hereinafter – STI) for help. Immigrant entrepreneurs from India and Egypt who have already visited STI more than once agreed to share their experiences. C. S., a man from India, who is living in Lithuania for several years and is developing his private enterprise, claimed that on all occasions, when he had to go to STI, he remained confused and frustrated: “Employees seemed quite friendly, but I noticed that they communicated with foreigners differently than with Lithuanians. It seems that they are watching at us through a magnifying glass. They were always very demanding and severe with me, and completely unwilling to compromise. In the meantime, I noticed that with Lithuanians they were looking for some mutually beneficial solutions.” The man also noted that even when he had asked his Lithuanian friends to accompany him to that institution, the situation did not change. However, the entrepreneur from India recognized that the reason of such behavior was because of a widespread belief that
the aliens set up a lot of bogus businesses in Lithuania and left everything to chance: : “I’m ashamed of those foreigners who are fictional businessmen. Because of them suffer those who are engaged in real activities – we are checked very often, even though we all carried out under the Lithuanian law. I do not know if it is possible here to reach a compromise. It is shame to me as an immigrant and I grudge that other people of similar fate are trying to survive in a wicked ways and then victims of that are all of us..” Another disadvantage, on which pointed the entrepreneur from India, was the lack of English language proficiency in state institutions. The employees of STI, according to the businessman, either could not speak English or had a very narrow vocabulary,so often there was a problem of
miscommunication: “I would suggest that at least one or more employees should work as agents and mediators in such institutions, and play an advisory role. They should be able to mediate and explain the situation, translate and provide the necessary information to an alien who comes to the public body. It would be a great relief to me. ” The businessman said that he noticed that very often foreigners who had applied to the STI were referred from one employee to another trying to roll over liabilities, while the Lithuanians arranged all their matters with one employee. “I am almost convinced that the STI employees are more forgiving for Lithuanians, and they simply do not like foreigners, because they cause more problems. When you know this attitude it is very difficult to go to the authorities
Centre Plius News No.4, 2013
and to seek help.” – said C. S. Another businessman from Egypt who is living in Lithuania since 2005 and is developing his business in export field, said that at the beginning he had confronted with many different problems: “The beginning was so difficult that I even do not want to remember it. Often there were moments, when I wanted to drop everything and go back to my country, because everyone seemed hostile to me. But I firmly kept my plans and purposefully pursued my goals. That probably helped.” Egyptian remembered that after he had come to Lithuania, he intensely studied Lithuanian language: “I do not know how everything could be ended, if I would not speak the Lithuanian language, because at STI almost nobody spoke English. It would be impossible to me to manage all the affairs.” The businessman remembered the times, when he had to sign dozens
of documents and nobody explained, why all this was necessary and what was written in them: “They were passing me a document and saying that I had to sign it and that was all. At that time I survived a shock. But I trusted and believed in those people because they were from STI. And on the other hand, I can see pluses, because that situation pushed me to learn the language as quickly as possible.” J. G. welcomes the fact that the tax system in Lithuania is relatively stable and regular, but it lacks a bit of clarity, especially for foreigners: “My recommendation would be that they should have at least a few employees who speak English and are able to play an advisory role and help foreigners to understand the current situation and to advise and explain, what documents are needed and what are not. Then,
I think, the whole process will quicken and both sides will be satisfied.” The businessman remembered that when he addressed to an employee who spoke at least a little English and was inclined to cooperate then the whole process moved faster. Those immigrants did not experience the very negative situations however visits to the STI had always interrelated with some stress and uncertainty. This problem could be facilitated by English-speaking staff, which could carry out the intermediary role and provide the necessary information to foreigners
The newspaper is published, implementing the project “Consultation and information centre PLUS” according the European Fund for the Integration of third-country nationals, annual Programme 2012
CENTRE PLUS · A.Smetonos street 5, room No 302 · Vilnius Tel.: 85 261 74 82 / 8 605 77 245 Email: centre@tja.lt · www.facebook.com (search for: Centre Plus) Working days: Monday to Friday · Opening hours: 11:30 to 15:30 and 16:30 to 20:30