VMI: late registration alone does not mean VAT on Lithuanian sales

A new clarification from the State Tax Inspectorate (VMI) matters to small businesses that buy advertising or other services from abroad. In a letter of 30 September 2026 to the Lithuanian Association of Accountants and Auditors (LBAA), No. RTD-112, VMI explained that failing to register for VAT on time does not, by itself, create an obligation to charge VAT on goods sold or services supplied in Lithuania.

What VMI clarified

In the letter, VMI says it has looked again at the rules of the EU small business VAT scheme (SME scheme) and agreed its position with the Ministry of Finance. The exemption of Lithuanian sales is tied to staying within the set turnover threshold and to the absence of any other circumstances that give rise to a VAT liability.

The clarification covers situations where, from 1 May 2025, the obligation to register arose from buying services from abroad, acquiring goods from other EU countries or supplying certain services in other EU countries, but the person did not register on time.

This is a clarification of VMI's position on how the current rules apply, not a new amendment to the Law on VAT taking effect from the date of the letter.

Which conditions matter

For late registration alone not to create a VAT liability on Lithuanian sales, these conditions must be met:

• the consideration for economic activity carried out in Lithuania, assessed under the Law on VAT, did not exceed €45,000 in the previous calendar year;
• that threshold is not exceeded in the current calendar year either;
• there are no other circumstances set out in the law that would require VAT to be charged on Lithuanian sales.

So the conclusion “I did not register, therefore I owe no VAT” would be inaccurate. Lithuanian sales must be assessed separately from the transactions that created the obligation to register and to calculate the tax.

What this means in practice

For example, imagine a self-employed person whose consideration for Lithuanian sales counted towards the threshold was €30,000 in 2025 and €25,000 in 2026 up to the date of assessment. They bought advertising services from a foreign supplier and had to account for the VAT on them themselves, but did not register on time.

If there are no other circumstances that give rise to a VAT liability, then under the VMI letter the late registration alone is no ground for taxing their Lithuanian sales. The VAT on the advertising services and the registration itself still have to be put in order, however. If the threshold is exceeded later, the taxation of sales is assessed under the usual rules of the law.

Can FR0608 returns already filed be corrected

Yes. The VMI letter allows the FR0608 returns for the relevant periods to be corrected where VAT on Lithuanian sales was calculated and paid solely because of such a registration obligation, even though the conditions for exempting the sales were met.

Before correcting anything, it is important to establish which part of the declared amount relates to Lithuanian sales and which to foreign services or other taxable acquisitions. The whole VAT amount declared in a return cannot simply be cancelled.

Correcting the figures may produce an overpayment. The letter does not, however, mean an automatic refund: the actual balance, and whether it is refunded or offset, is assessed separately.

What this clarification does not change

The clarification does not remove the obligation to register or the VAT due on the relevant foreign services. It does not give an SME scheme participant the right to deduct input VAT. Nor does the letter give a separate explanation of fines for failing to meet the registration obligation.

A business that has already declared VAT on Lithuanian sales because of late registration should review the periods from 1 May 2025, its turnover calculation and the basis of the specific amounts declared.