Lithuanian VAT Return Evaluation Starting November 2024
As of November 2024, the Lithuanian tax administration introduced a cross-check mechanism for sales data in VAT return and Ledgers, or i.SAF system.
The Lithuanian tax authorities have published a guide outlining the new automatic checks that will ensure the VAT declaration (form FR0600) aligns with the sales data submitted in the ledger’s return, also known as i.SAF. This change aims to streamline the process for both the tax administration and taxpayers.
New Data Evaluation Process
The system will notify taxpayers about any discrepancies between their VAT return and i.SAF data each time a return is filed. Notifications will be sent through the EDS (Electronic Declaration System), allowing taxpayers to identify and correct any errors without needing to engage directly with the tax authorities.
Taxpayers will have 10 working days to resolve any discrepancies identified in the VAT return.
In case you have corrected the i.SAF declaration as a result of the discrepancies notified, you do not need to submit again your VAT return. Instead, the status of the return will change from "Document accepted with identified deficiencies" to the status "Document accepted".
Romania implemented a similar cross-check mechanism known as the e-TVA statements.
Initial Phase of Implementation: Sales Data
In the initial stage, the evaluation will focus only on the domestic sales transactions in Lithuania. The tax administration will compare the VAT declared on sales in the return with the VAT amount calculated in the VAT invoices register.
Although any discrepancies found will not be treated as critical errors at this stage, taxpayers will still need to rectify them.
Impact on Filing Deadlines
It is important to note that these new verification measures will not affect the existing filing or payment deadlines. For instance, if a VAT return is filed on the last day of the deadline (25th of the month) and is not rejected due to critical errors, the taxpayer will not receive any additional reminders, even if the data evaluation process is ongoing.
This new initiative by the Lithuanian tax administration aims to simplify the VAT filing process, providing more transparency and ensuring that discrepancies are addressed promptly, reducing the likelihood of delays or errors in VAT filings. If a taxpayer fails to respond to the discrepancy notification and does not take corrective action, the tax administration may pursue follow-up measures.
You may find here the official guidelines from the Lithuanian tax administration.
How can Marosa help you?
Understanding Lithuania's new VAT evaluation process is crucial to helps businesses avoid errors and penalties. Our tax compliance services and VAT reporting software ensure accurate VAT returns, identify discrepancies, and manage deadlines, allowing clients to stay compliant and focus on operations without the administrative burden.