VAT in Lithuania (PVM) — 2026 Guide

The Rates

VAT — pridėtinės vertės mokestis, PVM — is Lithuania's consumption tax. Four rates apply.

The 12% list is short and closed: for 2026 it holds exactly three categories, all of them services — accommodation supplied under the tourism rules, scheduled passenger and baggage transport, and admission to art and culture institutions and events. Nothing else qualifies, per VMI's own list.

The 5% list is set by article 19(4) of the VAT Law. It holds three groups:

• Medicines, medical aid devices and special medical-purpose foods where the cost of acquiring them is wholly or partly compensated — and non-compensated prescription medicines, which point 1 names explicitly.
• Technical aids for people with disabilities, and their repair.
• Printed and electronic newspapers, magazines and other periodicals, alongside books and non-periodic publications. Point 3 covers print and electronic alike.

That third point has a carve-out. It does not apply where advertising exceeds four fifths of the publication, or where the content is mostly music or video. The wording is in the consolidated VAT Law.

What did not go to a reduced rate: district heating, hot water and firewood. They moved from the old 9% to the full 21%.

When You Must Register

You must register as a VAT payer once your total consideration from taxable economic activity in Lithuania exceeds €45,000.

The basis changed too — and this catches people out

From 1 May 2025, the €45,000 threshold is calculated over the calendar year — not over a rolling last-12-months period, as it was previously. If you're working from older guidance, or from an accountant's habit, this is a real change. It means your counter resets each January rather than continuously trailing the past twelve months.

There are also separate rules for acquisitions of goods from other EU member states, which can trigger a registration obligation independently of your sales. That threshold is €14,000 of acquisitions per calendar year — see VMI's registration guidance. If you're buying stock from within the EU, track that figure separately from your sales.

A separate route exists in the other direction. Under the small business scheme (smulkiojo verslo schema), in force since 1 May 2025, a small business can trade VAT-exempt with a Lithuanian threshold of €45,000 and an EU-wide turnover threshold of €100,000, reporting quarterly; the identification number is issued within 35 working days. It did not change with the 2026 rate reform — that is a separate reform, a year later.

Track your turnover as you go. The obligation bites when you cross the line, not at year end. If you're anywhere near €45,000, know your running total — registering late creates problems that registering on time doesn't.

Adding and Removing VAT

Two operations, and the second one is where people go wrong.

The classic error. Taking 21% off a gross price of €1,210 gives €955.90 — wrong by €44.10. The percentage was applied to the net figure, so you have to work backwards by dividing. Our VAT calculator handles both directions.

Registering Voluntarily

You can register below the threshold if you choose. Whether you should depends almost entirely on who your customers are.

Worth considering if…

• Your customers are VAT-registered businesses — they reclaim it, so your price doesn't rise for them
• You have significant input VAT to reclaim — equipment, software, services
• You're near the threshold anyway
• You want to look established to B2B clients

Probably not if…

• Your customers are consumers — your prices effectively rise 21%
• Your input costs are minimal
• You'd rather avoid the filing burden
• You're well below the threshold with no plans to grow past it

Cross-Border and the Reverse Charge

If you sell services to businesses in other EU member states, the reverse charge mechanism often applies: you don't charge VAT, and your customer accounts for it in their own country.

This matters a great deal to Lithuanian freelancers and consultants with EU clients, because it's frequently the difference between charging 21% and charging nothing.

• B2B services within the EU — reverse charge commonly applies. You need your client's valid VAT number
• B2C sales within the EU — different rules, and distance-selling thresholds may apply
• Services to clients outside the EU — generally outside the scope of Lithuanian VAT, but confirm for your service type
• Your invoice must state that the reverse charge applies

Verify your client's VAT number before invoicing. The reverse charge depends on your customer genuinely being a taxable person in another member state. The EU's VIES system lets you check a VAT number's validity — do it, and keep the record.

Reclaiming Input VAT

Once registered, you can generally reclaim VAT paid on qualifying business purchases — that's the other side of the bargain.

• You need valid invoices. No invoice, no reclaim. This is the single most common reason claims fail
• The purchase must be for taxable business activity
• Some categories are restricted — entertainment and certain vehicle costs are commonly limited
• Mixed personal and business use requires apportionment

Keep everything. The administrative burden of VAT registration is mostly documentation, and it's much easier to keep records as you go than to reconstruct them.

Invoicing and Filing

Your invoices must contain specific information — and the list is longer than most people expect. Article 80(1) of the VAT Law (PVMĮ) sets out 19 mandatory items, covering the date and serial number, both parties' names and VAT numbers, the description and quantity of the supply, the taxable amount, the rate applied, the VAT amount separately, and where relevant a reverse charge notation. VMI's commentary on article 80 works through all 19. Getting invoice format wrong causes problems for your customer as well as you.

Returns are filed periodically and electronically through VMI's system. How often depends on who you are, and the rule is article 84 of the VAT Law — not article 88, which deals with the return of a person being deregistered or liquidated.

• A natural person gets the calendar half-year automatically. Article 84(4). You do not apply for it. You apply only if you want the calendar month instead, and the switch takes effect from the start of the next half-year.
• Everyone else files monthly by default. Article 84(1).
• A VAT payer other than a natural person may ask for the calendar quarter if its economic-activity income last year did not exceed €300,000. Article 84(2). There is no half-year option for legal entities in the current text — a VMI page still describing one at a €60,000 threshold is stale.

The annual return FR0516 is due by 1 October of the following year, under article 87(1). You only owe it where the year-end figures mean your VAT deduction has to be adjusted. Both articles are in the consolidated VAT Law.

Prices shown to consumers include VAT. Lithuanian retail prices are displayed gross — the shelf price is what you pay. B2B quotes are frequently net, which is a recurring source of disputes. If you're quoting as a freelancer, say explicitly whether your rate includes VAT.

Common Mistakes

Using the old 9% rate

Abolished from 1 January 2026 and replaced by 12% and 5% — except for district heating, hot water and firewood, which went the other way, from 9% to the full 21%. Most online guidance hasn't caught up.

Subtracting 21% to remove VAT

Divide by 1.21. Subtracting gives the wrong answer every time.

Assuming the threshold is a rolling twelve months

It's calculated over the calendar year now. The counter resets in January.

Not tracking turnover until year end

The obligation arises when you cross €45,000, not when you notice.

Applying the reverse charge without checking the client's VAT number

Verify it, and keep the evidence.

Quoting B2B without specifying net or gross

A frequent cause of invoice disputes among freelancers. Be explicit.

Reclaiming without valid invoices

The documentation is the claim. Without it there's nothing to reclaim.

Frequently Asked Questions

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