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Lithuania: Updated transfer pricing documentation requirements

Lithuania: Updated transfer pricing documentation

New transfer pricing documentation requirements in Lithuania generally will be effective 1 January 2021.

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The new transfer pricing documentation requirements (Lithuanian) (19 October 2020) are aligned with recommendations from the OECD base erosion and profit shifting (BEPS) Actions 8-10.

Among the measures in Lithuania’s updated transfer pricing documentation requirements are the following:

  • A simplified approach for low value-adding intra-group services, by allowing taxpayers to apply a mark-up of 5% of the allocated costs without the need of having to be justified by a benchmarking study
  • Simplified tax administration processes with regard to controlled transactions related to hard-to-value intangibles and provisions allowing tax administrator to retroactively adjust the price of the controlled transaction on the basis of information received after the transaction
  • Simplified procedures for documenting controlled transactions with the elimination of a requirement to prepare transfer pricing documentation for transactions between Lithuanian taxpayers
  • Clarification of the procedure for applying the transactional profit-split method

The updated requirements relating to documentation of low value-adding intra-group services and transactions between Lithuanian taxpayers will apply with regard to the calculation of corporate income tax for 2020 and subsequent tax periods. The updated requirements for transactions related to hard-to-value intangibles will apply for controlled transactions carried out as from 23 October 2020.

In a related development, the Lithuanian tax authorities announced there will be an increased focus on controlled international transactions, with special attention to financing and services transactions.


For more information, contact a tax professional with KPMG’s Global Transfer Pricing Services practice in Lithuania:

Giedrius Biconas | +370 5 210 2600 | gbiconas@kpmg.com

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

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