VAT – Value Added Tax – is a general tax applied to all goods and services sold and bought for consumption within the EU area. VAT is calculated on the value added to services and goods by a trader at each level of the production and allocation chain.
On the contrary to state confirmed an official taxes, VAT is a multistage tax charged at each level of the supply chain. It is collected through a system of partial proficiency. It allows for taxable legal entities that identified for VAT aims to count off from the VAT fee, the amount of VAT that they have paid for business purchases in the previous (production) stage. This above mentioned system guarantees that the tax is neutral, regardless of the majority of transactions.
The structure and main principles of VAT are incorporated in EU law. However, the EU
consists from 28 countries that apply different VAT system. Accepted laws on VAT were aligned, although locally VAT legislation remains still differ in countries-members of EU.
In Lithuania standard VAT ( in local language PVM) rate is 21 % within reduced rates of 9% and 5%. Starting from 2015 January the 1st the following VAT amendments are currently being discussed in Government. 5% VAT will apply to following goods and services :
- freshly chilled poultry;
- transport of animals, meat products and preparations;
- freshly frozen meat.
Advice on VAT in Lithuania you should expect to get directly visiting local authorities or visiting the official website of State Tax Inspectorate, also this kind of information grants many national private tax consulting companies that provide legal and tax services.