Lithuania Clarifies Small-Business VAT Exemption Where Cross-Border Transactions Trigger Registration

Summary 

• A Lithuanian VAT-registration obligation caused by specified cross-border transactions does not by itself require VAT on domestic supplies where local turnover stays within the EUR 45,000 threshold. 
• The domestic exemption may continue where Lithuanian turnover did not exceed EUR 45,000 in either the previous or current calendar year, even though VAT registration remains required. 
• Taxpayers that charged VAT solely because of the cross-border registration trigger may correct relevant FR0608 returns, while users of the small-business scheme cannot deduct input VAT. 

Extended article 

The State Tax Inspectorate reassessed the interaction between Lithuania’s domestic exemption and registration obligations arising from acquisitions of goods from other EU Member States, purchases of services from foreign suppliers, or supplies of services to customers in other Member States. 

Affected businesses must still register, choosing either the ordinary VAT regime or VAT registration while applying the small-business scheme. The clarification separates registration status from the tax treatment of local turnover. It also creates a corrective route for taxpayers that unnecessarily charged Lithuanian VAT while remaining below the domestic threshold. 

Source 

• Lithuanian State Tax Inspectorate: Clarification of 13 October 2026 
• EUR-Lex: Directive (EU) 2020/285 on the VAT Small-Business Scheme 

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