Changes to VAT law
From 1 May 2025, important changes to VAT law will come into force that will directly affect small businesses, sole traders, small partnerships and even self-employed creators.
New VAT registration procedures
The €45,000 threshold remains unchanged, but from 2025 it is calculated on a calendar year basis (2024 and 2025).
If the threshold is exceeded in at least one year, VAT registration is compulsory
Small Business Scheme (SBS)
Applies to those who do not exceed the threshold of €45,000.
Can apply to IDVs, MBs, LLCs and other taxable persons.
Allows the application of the SVS in other EU countries with an EX number.
For example, a Polish company can operate in Lithuania with an EX number and use an SVS.
Non-standard VAT payer:
- You buy goods from the EU for more than €14 000 per calendar year
- Buying any services from abroad
- You supply services to taxable EU customers
Such a taxable person does not tax his services in Lithuania and has no right to deduct VAT. A non-standard VAT payer must issue invoices (simplified invoices can be used).
The FR0608 will be amended to use the new VAT101 form.
Even if they become non-standard VAT payers, SBS participants cannot deduct VAT.
Practical aspects
Obligations apply from the first euro (e.g. Canva, Facebook services).
The status of suppliers needs to be checked – especially with regard to the application of reverse VAT.
VMI behaviour and risks
The STI may send reminders about the registration obligation.
Incorrectly applied status or VAT can lead to losses.
Check out
Available from 1 January if you have not been required to register for 2 consecutive years.
Voluntarily registered VAT taxable persons must have been registered for at least 24 months.
Other nuances of transactions
A non-standard VAT taxable person cannot be a lessee subject to VAT.
When buying from abroad, check that the supplier has an EX code.
Triangular trade – reverse VAT applies but there is no right to deduct.
