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Taxation

According to the Law on the Corporate Income Tax, the non-profit organization shall mean an entity that satisfies the following two criteria:

 

  1. It is established for other than profit-making purposes, i.e. for the aims specified in their Articles of Association, and
  2. It cannot distribute the profits generated under the legal acts regulating its activities among its founders and/or members;

 

Register of Legal Entities shall inform the State Tax Inspectorate about the registration of a legal person. Within 5 days from the registration of the new legal entity, an organization has to fill in and deliver the form FR0791 on the enlistment in the register of taxpayers to the STI. Later on the organization has to notify the STI about any additions (modifications) to the registration data submitted to the Register in the form FR0791 (telephone number of the registered office, fax number, e-mail address; working hours of the registered office; main type of activities; personal data of the account keeper; data of non-autonomous structural units).

You may find more information at the website of the State Tax Inspectorate.

Here is the brief information concerning every tax which a non-profit entity may have to face.

Corporate income tax
 Personal income tax
 Immovable property tax
 Social tax
 VAT
 Sponsorship
General notes
 Non-profit entities are subject to corporate income tax if they gain income as a result of commercial activity the income thereof are attributed to the income received after selling goods or other property, providing payable services as well as other income from commercial activity.    

Income that is exempt from PIT (food up to 20 percent of MLS; documented accommodation costs; documented travel costs; documented costs related to arrival to Lithuania, etc.) is specified in Article 17 of Personal Income Tax. Provided a member fails to present documents or the compensation exceeds the established limits, the income shall be subject to PIT.

  • Taxable income of A class (salary, royalty, etc.) shall be paid by their payer;
  • Taxable income of B class shall be paid by its recipient (from individual activity, etc.).

 

 

 Article 5 of the Law on Immovable Property Tax provides that immovable property belonging to certain organizations (by the right of ownership or indefinite use) shall be exempt from tax.    
 Paid only by those who are engaged in commercial activities. A Law on Temporary Social Tax is applied for the calculation of tax for the periods that began on 2006 and 2007.    
 Non-profit entities engaged in economic activities are obliged to register as VAT payers if the total received amount of payment within 12 last months exceeds 100 000 LTL and/or the amount of goods purchased from the EU Member States exceeds 35 000 LTL    

The sponsorship shall be subject to tax if:

  • used inexpediently;
  • The amount of sponsorship received in cash from a single provider exceeds 250 minimum living standards (MLS).

Declaration is presented until 15 of May. Declarations of 2 percent support.

 

 
Tariffs

If the commercial activity income during the tax period do not exceed 1 million LTL:

  • 0 percent tax applies for 25 000 LTL;
  • 20 percent tax applies for the remaining part

 

If the income during the tax period exceed 1 million LTL, the entire amount shall be taxed 15 percent.

Corporate income tax shall be paid until October 1 of the upcoming year

 According to Article 6 (2) of the Law on Personal Income Tax (rent of property; copyright agreement, etc.) are subject to 15 percent tax;    

 

 Immovable property tax rate is established by the municipality in which the object is located.    
 Social tax is levied on taxable profit calculated according to the Law in Corporate Income Tax.    

VAT tariffs specified in Article 19 of the Law on Value-Added Tax:

  • 19 percent;
  • 9 percent;
  • 0 percent;

 

 

 A part of sponsorship exceeding the 250 MLS is subject to 15 percent tax.
Declarations

Annual declaration form PLN204N shall be filled in provided commercial activity is carried out.

Entities not subject to corporate income tax shall not submit declarations but shall notify the grounds of not providing it to the STI in writing.

 

Monthly declaration form FR0572 of A class income

Annual declaration form FR0572 of A class income

Certificate form FR0471 of disbursed B class income

 

 Declaration form KIT701
 Declaration form KIT702

Annual declaration form FR0478 and a report of free form;

Monthly PLN203 form when support from a single person exceeds 50 000 LTL

 
Legal acts

Law on Corporate Income Tax;

Law on Charity and Sponsorship;

Law on Personal Income Tax;

Order of the Government on the establishment of amounts of tax-exempt compensations

 

Law on Immovable Property Tax

Provisional Law on Social Tax

Law on Value Added Tax

Law on Charity and Sponsorship;

Order of the Minister of Finance of the Republic of Lithuania on the procedure and terms of provision of sponsorship providers' and recipients' annual reports.

 

The information provided in the overview is only a main guideline. Other taxes may be levied according to the specific activities of an organization. More information can be found in the explanation of the STI "Specific Issues of Non-profit Organizations' Taxation" (in Lithuanian). In general, complete information is provided in the STI website http://www.vmi.lt or you may call free advice line of the STI - 1882.