Lithuania approves reduced VAT rate on heating

The Lithuanian State Tax Inspectorate announced that in response to the rising household heating and hot water supply prices and their toll on the Lithuanian residents, the Lithuanian government established a temporary VAT relief on these amenities. As a result of the most recent legislation, Lithuanian residents pay a VAT-exclusive amount for heating and hot water.

Based on the new provision, the VAT rate on hot water and heating is reduced from 9 % to 0 %, and the VAT loss is to be covered from funds from the national budget.

Even though the provision came in place on April 1, 2022, the reduced VAT rate has been applied from January 1, 2022, to April 30, 2022. Therefore, heating suppliers must amend the previous accounting records or cover the difference by reducing the amount charged in the upcoming month‘s bill. The 9 % VAT difference will be reimbursed once the heating energy providers submit the FR0766 v.2 to The Lithuanian State Tax Inspectorate.

Similar VAT relief measures have been initiated in the region, with Poland reducing VAT on electricity to 5 %, the VAT on natural gas to 0 %, and fuels to 8 % from the previous 23 % VAT

Corporate Tax