Updated 2022-04-12
Tax news
Taxation of remote work
As it was intended, the Lithuanian Ministry of Finance have provided a possibility for Ukrainians, working remotely from Lithuania, to continue paying taxes to the Ukrainian state budget. Under Order No. 1K-106 of the Lithuanian Minister of Finance dated 25 March 2022, days spent by Ukrainians in Lithuania, calculated as of the day they register with the Migration authorities until the end of war crimes in Ukraine, would be excluded from the number of days calculation for tax purposes. Due to this, Ukrainians, who work remotely for Ukrainian or other foreign companies in Lithuania (not acting via a Lithuanian permanent establishment) will not be treated as Lithuanian tax residents and therefore not taxable in Lithuania on foreign employment income.
To note, where the vital personal, social and economic interest of Ukrainians who fled to Lithuania would basically switch to Lithuania, the above discussed exemptions would not apply and they would become tax residents in Lithuania under the general rules (to be analysed on case by case basis).
More information can be found here(LT).
Explanations of the Tax Authorities
Lithuanian Tax Authorities have published additional explanations on various issues in respect of personal income tax, corporate income tax, VAT and other tax liabilities.
More information can be found here (LT).
Legal news
Procedure for payment of compensation to Lithuanian persons receiving residents of Ukraine
The Minister of Social Security and Labour of the Republic of Lithuania has approved the procedure for calculating and paying of compensation for the provision of accommodation on the basis of commodate to foreigners who have left Ukraine due to the military action of the Russian Federation in Ukraine and are registered with the Migration Department.
Both natural and legal persons (except public legal entities) can apply for compensation to the municipal administration (according to the address of the place of registration of accommodation). The latter shall make a decision on the payment of compensation no later than within 10 working days from the date of registration of the application with the municipal administration and shall inform the person applying for compensation of the decision no later than within 5 working days. Compensation is paid for the previous calendar month (period), but not later than the 15th day of the current calendar month.
The compensation is EUR 150 per month for the first accommodated person and EUR 50 for each additional person. The aforementioned amounts shall be paid from the second month of accommodation of Ukrainians and for the maximum period of three months, unless the accommodation is subsequently provided and a new commodate is concluded with another person meeting the criteria laid down by law. It is also important that the lender would pay the maintenance fees from the day of transfer of the accommodation on the basis of commodate and during the compensation period, and if the registered foreigners are accommodated in premises (hotel, leisure, medical) where these fees are not paid separately, – provide a free accommodation.
More information can be found here (LT) and here (LT).
The employment of architects and civil engineers from Ukraine is being accelerated and simplified
The Ministry of Environment of the Republic of Lithuania (Ministry of Environment) shortens the procedure of recognising the professional qualifications of architects and civil engineers and simplifies the procedure for submitting documents to Ukrainians.
The whole process is expected to take up to 1 month. A more flexible procedure will be applied and formalities minimised: only minimum documents will need to be provided and the authenticity of these documents will be possible for the applicant to certify (without the need of a notary or the relevant authority). Only the translation of the most necessary documents (diploma or other document experiencing the professional qualification of an architect, civil engineer) into Lithuanian will have to be submitted.
In the event that an Ukrainian national does not have a diploma of an architect or civil engineer, or another document certifying the professional qualification of an architect or civil engineer, the Ministry of Environment will examine other information provided by the applicant or other institutions on education, architecture and engineering activities.
More information can be found here (LT), here (LT) and here (LT), as well as here:
Legal aid
Nationals of Ukraine who are currently in the Republic of Lithuania may apply to the State-Guaranteed Legal Aid Service for legal advice or assistance.
The list of Lithuanian attorneys-at-law and their legal assistants providing free legal consultations can be found here (UA).
More information can be found here (UA and LT).
2022-03-22 Legal news
Introducing of temporary protection
Pursuant to the Governmental Resolution a temporary protection has been granted for the period from 4 March 2022 to 4 March 2023 to the following persons:
(i) who left (were displaced from) Ukraine on or after 24 February 2022 as a result of the military aggression by Russia, and who are:
- Ukrainian nationals residing in Ukraine before 24 February 2022, or
- stateless persons and nationals of third countries other than Ukraine, who benefited from international protection or equivalent national protection in Ukraine before 24 February 2022, or
- family members of the persons referred to above, or
- stateless persons or nationals of third countries other than Ukraine, who may prove that they were legally residing in Ukraine before 24 February 2022 on the basis of a valid permanent residence permit, and who are unable to return in safe and durable conditions to their country or region of origin;
(ii) who have temporarily left Ukraine no earlier than 24 February 2022 and have been legally present in the territory of the European Union or in other third state, when they meet the above mentioned conditions and will be entering Lithuania before 1 May 2022.
Persons granted with a temporary protection are exempted from certain obligations imposed on foreigners (e.g. proof of sufficient funds is not required when applying for a temporary residence permit). In addition, they may receive certain social support (e.g. social benefits, compensation for water).
More information can be found here (EN) and here (LT).
Social guarantees
In order to ensure that at least the minimum needs are met and taking into account the fact that such persons may stay in the territory of Lithuania for up to 2 years, it is important to create legal preconditions to offer more social support. Thus the Parliament passed amendments to certain legal acts that will allow the mentioned persons to enjoy a wider range of social support, e.g. payments to children, funeral compensations, additional services for the disabled persons.
More information in Lithuanian can be found here, here, here, here, here, here, here and here.
Health care services
The Ministry of Health and the Fund of National Health Insurance have prepared a memorandum on concentrated and accurate information about health care services available in Lithuania for the persons concerned.
More information can be found here (LT), here (UA), here (EN) and here (RU).
Exemption from the state language requirement
On 18 March 2022 the amendment to the Governmental Resolution came into force, which provides for an exemption from the requirement to know the state language for 2 years for those foreigners who are or have been granted with the temporary protection in Lithuania in order to apply for a job for which it was necessary to speak the Lithuanian language. This may provide an opportunity for teachers and other professionals to start working in Lithuania.
More information in Lithuanian can be found here and here.
Facilitating employment conditions for the Ukrainian medics
The State Health Care Accreditation Agency is accelerating the process of recognising the Ukrainian professional qualifications and has simplified the conditions for issuing licenses for personal health care professionals. A doctor from Ukraine willing to start working as a personal health care specialist in Lithuania (e.g. doctor, dentist) must first apply to the Accreditation Agency for recognition of the acquired professional qualification. Once a professional qualification has been recognised, he/she must apply for a license. For Ukrainians, certain deadlines for processing of applications have been shortened and the requirements to submit certain documents has been waived.
More information can be found here (LT and RU) and here.
Expected compensations to those accommodating the Ukrainian nationals
It is planned that the Lithuanian residents accommodating Ukrainians might be paid EUR 150 per month for the first accommodated person and EUR 50 for each additional person. The aforementioned amounts would be paid from the second month of accommodation of Ukrainians and for the maximum period of three months. The modalities and conditions for the payment of the compensation are still being negotiated, but the final version of the decision should be available soon.
2022-03-22 Tax news
Support to Ukraine
As it was discussed, Lithuanian Parliament has passed the amendments of the Lithuanian Law on Charity and Support (hereinafter – LPA), which provides wider possibilities for Lithuanian entities to grant support to Ukrainian entities. Under the new rules of this law, not only to support to Lithuanian recipients is recognized as valid support, but also that support provided to non-profit entities established in democratic countries respecting rule of law, experiencing military aggression and its consequences. List of such countries to be approved by the Government.
The new rules of LPA will take effect as of 1 April 2022 and be applicable since the introduction of the state of emergency.
More information in Lithuanian can be found here.
Explanations of the Tax Authorities
Lithuanian Tax Authorities have published a number of explanations on various issues in respect of personal income tax, corporate income tax, VAT and other tax liabilities. Questions are related to support granted to Ukrainians, their employment, providing work and residence opportunities.
More information in Lithuanian can be found here.
Simplified tax reporting rules and tax registration for Ukrainians
Lithuanian Tax Authorities have simplified rules for annual tax return submission for non-Lithuanian tax resident Ukrainians, who received employment income for work in Lithuania from Lithuanian entities in 2021. In order to apply the annual tax-exempt amount, upon submitting the annual non-resident’s tax return (form GPM314), no longer the certificate from the Ukrainian tax authorities be required, certifying income received and taxed paid in Ukraine in 2021 or that no income was received.
Ukrainians willing to register their individual activities (as self-employed) or acquire business certificate are no longer required to provide residency permits. It is sufficient to provide foreigner’s registration certificate which indicates the foreigner’s name, surname, date of birth and registration number (ILTU code).
More information in Lithuanian can be found here.
Taxation of remote work
Lithuanian Ministry of Finance has informed that it is intended to provide a possibility for Ukrainians, working remotely from Lithuania, to continue paying taxes to the Ukrainian budget. This could be treated as an exemption to the general rule meaning that employment income would be taxable in Ukraine, even though the work is performed in Lithuania.
It is noted that the exemption would be applicable to company employees of any sector, which can work remotely. The only requirement applicable – the employee should have been employed at the Ukrainian company before fleeing Ukraine.
Information for refugees from Ukraine
As of 1 March 2022 migration related matters and employment procedures have been simplified in Lithuania for Ukrainian nationals, their family members and stateless persons residing in Ukraine (hereinafter – the Ukrainians). The changes were made considering the current situation in Ukraine.
Registration in Lithuania
Ukrainians arriving in Lithuania must register with the Migration Department (more information here). The registration is necessary in order to provide them with the necessary assistance and legal stay in Lithuania.
After the registration the individuals will be able to obtain:
- a temporary residence permit in Lithuania (for 1 year);
- a national visa (for 1 year).
Ukrainian nationals with biometric passports are subject to visa-free regime (90 days within 180 days).
For more information click here.
Residence permit in Lithuania
For Ukrainians, who do not have a valid foreign passport, a national visa would not be issued in Lithuania. However such individuals would be able to apply for a temporary residence permit for humanitarian reasons.
Right to work in Lithuania
As of 1 March 2022, Ukrainians no longer need a work permit and also they are exempted from the obligation to obtain decisions on the compliance of the foreigner‘s work (with the needs of the labor market of Lithuania) from the national Employment Service authorities. Therefore, companies employing Ukrainians will no longer have to apply to Employment Service for work permits or/ and work compliance decisions.
It is important to note, that employers, who have concluded an employment contract with a Ukrainian still have an obligation to submit notification (called LDU) via the State Social Insurance electronic page. The aforementioned notice must be submitted not later than one working day prior to the day of his / her employment.
Other
Ukrainians who register in Lithuania are given an 11-digit personal identification number, which is recognized in state registers. Medical care and other necessary services are provided to Ukrainians arriving in Lithuania.
Additional guarantees for Ukrainians arriving in Lithuania should be introduced in detail in the near future.
Support to Ukraine
According to the current provisions of the Lithuanian Law on Charity and Support (hereinafter – LPA), currently it is not possible for companies to provide direct support to Ukrainian entities (that are not specified in the LPA). Therefore, the Lithuanian Ministry of Finance has shared an information that the relevant provisions of the LPA will be amended in the near future providing wider opportunities for direct assistance to Ukraine.
Tax liabilities in Ukraine
According to the information available to KPMG, currently it is possible to comply with tax obligations in Ukraine (e.g. to make transfers to the national budget of the country). Early payments of taxes are encouraged to support Ukraine.
Due to the current situation, the local tax administrator will not apply fines or interest for late filing or late payment of taxes during this period.