Lithuania extends reverse charge on construction services
Lithuania extended the reverse charge mechanism on construction services to the supplies of goods with installation related to construction.
Reverse charge in Lithuania extended on construction services
Reverse charging VAT is an exception to the general VAT rules. Normally, it is the supplier who must account to the tax authorities for any VAT due on the supply. However, for certain goods and services, the obligation to account for the VAT element of the transaction is ´reversed´ and passed to the customer. From an accounting point of view, this system only requires the VAT element to be booked for the same amount in the input VAT account and output VAT account, with the corresponding nil effect in the VAT position.