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New transfer pricing documentation requirements in Lithuania

New transfer pricing documentation requirements

The new requirements for Lithuanian transfer pricing (TP) documentation have been introduced on 31 December 2018 and are applicable to the related party transactions carried out in 2019 and the following years. The new requirements are prepared implementing the OECD BEPS project.

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Giedrius Biconas

Manager, Tax, Transfer Pricing services

KPMG in Lithuania

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Transfer pricing

Major changes in the TP rules:

  • The definition of a “Group of entities” has been expanded.
  • New turnover thresholds has been set:
    The entity will be required to prepare:
    -  Master File – if the turnover exceeds EUR 15 million and is part of an international group.
    -  Local File – if the turnover exceeds EUR 3 million.
  • Exemptions for low value transactions have been introduced. TP documentation will not be required if controlled transaction or the sum of controlled transactions during the financial year do not exceed EUR 90,000 per related party.
  • Deadlines for preparing TP documentation have been set. TP documentation has to be prepared by the 15th of the sixth month after the financial year end.
  • Periodicity of documentation updates has been set. TP documentation can be updated every 3 years if conditions and circumstances of transactions remain unchanged. The data of controlled transactions needs to be updated annually.
  • Sanctions for non-compliance with new requirements have been tightened. Non-compliance with the transfer pricing requirements will result in a penalty of EUR 1,820 – 5,590 (repeatedly – EUR 3,770 – 6,000).
     

© 2019 "KPMG Baltics", UAB, a Lithuanian limited liability company and a member firm of the KPMG network of independent members firms affiliated with KPMG International Cooperative ("KPMG International") a Swiss entity. All rights reserved.

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