- Proposed VAT Rate Adjustments: Lithuania plans to implement significant VAT changes effective January 1, 2026, including raising the VAT rate on heating and firewood to 21%, increasing the accommodation and cultural events rate from 9% to 12%, and reducing the VAT on books from 9% to 5% if approved by the Seimas by July 1, 2025.
- Impact on Various Sectors: The increased VAT on heating will lead to higher costs for households and service providers, particularly during winter, while the rise in accommodation and cultural event rates may result in higher prices for consumers in those sectors. Conversely, the reduced VAT on books aims to lower costs for publishers and readers, promoting access to literature and education.
- Preparation for Implementation: Businesses must prepare for the changes by updating pricing systems, accounting software, and customer communications well ahead of the January 2026 deadline to ensure compliance with the new VAT rates.
- VAT adjustments are planned for implementation on January 1, 2026, pending legislative approval by July 2025, affecting sectors such as district heating, books, accommodation services, cultural events, passenger transport, and insurance policies.
- The VAT rate for district heating, hot water, and firewood will rise from the current reduced 9% rate to the standard 21%, aiming to streamline tax rates across energy-related services.
- Books and non-periodical publications will benefit from a VAT reduction from 9% to 5%, a move intended to enhance public access to literature and support educational initiatives.
- A new 10% tax will apply to non-life insurance policies, excluding mandatory vehicle insurance, while VAT on accommodation, transport, and cultural services will increase from 9% to 12%.
Source: www.fiscal-requirements.com
