In relation to the outbreak of the COVID-19 virus and national lockdown introduced as of 7 November 2020, we remind of the applicable tax related measures aimed to assist taxpayers.

Tax payment:

• Taxpayers included in the list of taxpayers which were directly affected by COVID-19 related measures, are automatically released from late payment interest and no recovery of tax underpayments is initiated. This applies for tax liabilities incurred from 16 March until 31 December 2020. Taxes have to be paid or tax instalment (loan) agreement concluded by 28 February 2021.
• Other taxpayers not included in the list although affected by the COVID-19 related measures, may also apply to the tax authorities to become eligible for these reliefs by 31 December 2020. In such case relevant taxes must also be paid or tax instalment (loan) agreement concluded by 28 February 2021.
• These rules also apply to self-employed individuals.

Tax instalment (loan) agreement:

• Taxpayers directly affected by COVID-19 related measures may conclude an interest free agreement for a 2 year period – until 31 December 2022.
• Tax instalment (loan) agreement may be concluded for a longer period – 5 years. However, if the loan period exceeds 31 December 2022, general rules apply and interest is calculated (general rules apply). In addition, if the amount laid down is:
  - equal or greater than EUR 100 000 for an individual; or
  - equal or greater than EUR 200 000 for a legal entity,
  such taxpayers may be required to secure the payment of tax underpayments by pledge, mortgage, surety or guarantee.
• For other taxpayers not affected by COVID-19 measures general rules for concluding loan agreements apply.

For more official information please visit:

Order of the Head of Tax authorities re applicable tax measures and rules for concluding Tax instalment (loan) agreement (in Lithuanian) can be found here;

List of companies directly affected by COVID-19 can be found here.

Should you have additional questions or need specific advice, please contact our KPMG professionals.

Lithuania – tax reliefs due to COVID-19

In relation to the outbreak of the COVID-19 virus and national lockdown introduced as of 7 November 2020, we remind of the applicable tax related measures aimed to assist taxpayers. 

Tax payment:

• Taxpayers included in the list of taxpayers which were directly affected by COVID-19 related measures, are automatically released from late payment interest and no recovery of tax underpayments is initiated. This applies for tax liabilities incurred from 16 March until 31 December 2020 (previously, relieves should have applied until the end of extreme situation in Lithuania). Accordingly, taxes must be paid or tax instalment (loan) agreement concluded by 28 February 2021.
• Other taxpayers not included in the list although affected by the COVID-19 related measures, may also apply to the tax authorities to become eligible for these reliefs by 31 December 2020. In such case relevant taxes must also be paid or tax instalment (loan) agreement concluded by 28 February 2021.
• These rules also apply to self-employed individuals, whose activities are restricted/prohibited.

 Tax instalment (loan) agreement:

• Taxpayers directly affected by COVID-19 related measures may conclude an interest free agreement for a 2 year period – until 31 December 2022.
• Tax instalment (loan) agreement may be concluded for a longer period – 5 years. However, if the loan period exceeds 31 December 2022, general rules apply and interest is calculated.
• For other taxpayers not affected by COVID-19 measures general rules for concluding loan agreements apply.

For more official information please visit:

• Order of the Head of Tax authorities re applicable tax measures and rules for concluding Tax instalment (loan) agreement (in Lithuanian) can be found here;
• List of companies directly affected by COVID-19 can be found here. 

Support and safety at work – tax treatment

Lithuanian tax authorities published explanations to frequently asked questions regarding COVID-19 related measures.

Deductible expenses

The following necessary safety at work related expenses can be deductible for tax purposes during the current extreme situation:
• Expenses related to business trips or participation in events that have been canceled due to the quarantine;
• Additional benefits provided to employees, that are necessary to ensure continuous activities of a company during the outbreak of COVID-19. Such benefits should also not be regarded as benefits in kind for the employees, since expenses are incurred for the benefit of the company rather than employees;
• Expenses for disinfection means and services.

Sponsorship to medical institutions

Sponsorship provided to medical institutions, which do not have the formal status of sponsorship recipient during the extreme situation period, can be deductible for corporate income tax purposes.

Sponsorship exceeding EUR 14,500 can be deductible for tax purposes, even if it is impossible to conclude a notarized agreement which is formally required for support exceeding EUR 14,500.

When a VAT registered company provides aid by goods and has deducted input VAT, it does not have an obligation to calculate the use for private needs for such goods provided.

Lithuanian tax authorities have published the list of tax payers which were directly hit by COVID-19 related measures. These tax payers will automatically be subject to certain reliefs:

• Recovery of unpaid taxes will be suspended;
• They will be released from late payment interest;
• No interest will apply if a tax loan agreement is concluded.

 Similar measures will also apply to social security obligations.

The list is available here. Search should be made based on the identification number or name, also based on group for which these reliefs apply (in Lithuanian: “Mokesčių mokėtojai, kuriems taikomos mokestinės pagalbos priemonės dėl COVID-19".)

Other businesses which are not on the list, may also apply to the tax authorities for the reliefs, also for conclusion of a tax loan agreement.

More information available here (in Lithuanian).  

Corporate Income Tax (CIT):

• The deadline for submission of advance CIT returns and respective tax payment is deferred until 30 March 2020 (instead of 16 March 2020);
• Possibility to change the advance CIT calculation method, e.g. based on the prognosis for the current year (considering the possible income decline) instead of previous years’ results.

Tax Administration:

• Possibility to apply for tax instalment (loan) agreement to defer tax underpayments (without interest). It should also be available for employer’s Personal Income Tax (PIT) obligations (the exact terms and conditions should be confirmed);
• Suspended recovery of tax underpayments;
• Taxpayers to be relieved from penalties and late payment interest (the procedures still to be confirmed).

Personal income tax:

• For individuals the deadline for submitting the annual PIT return and tax payment deferred until 1 July 2020 (instead of 4 May 2020);
• The electronic version of the new tax return form GPM311 will not be released at least until April.

For more official information please visit:

• Restrictions applicable: https://lrv.lt/en/news/quarantine-announced-throughout-the-territory-of-the-republic-of-lithuania-attached-resolution
• Economic and financial plan: https://lrv.lt/en/news/eur-5-billion-for-public-health-and-the-national-economy

Should you have additional questions or need specific advice, please contact our KPMG professionals.