Lithuania: New transfer pricing documentation rules | KPMG Global
Share with your friends

Lithuania: New transfer pricing documentation rules in draft order

Lithuania: New transfer pricing documentation rules

The Ministry of Finance of Lithuania earlier in 2018 issued a draft order that to amend the existing rules that apply to controlled transactions—i.e., the transfer pricing rules. When finalized, the draft order would amend Order No. 1K-123 (9 April 2004).


Related content

Among the measures in the draft order are the following:

  • Previously, the tax authorities on examining whether a controlled transaction price was consistent with the arm‘s length principle were able to use a database that was not accessible to taxpayers. The draft order would require the tax authorities to use the information provided by or made available to taxpayers. 
  • The transfer pricing documentation would consist of Master and Local files for certain companies.
  • The Master file would be prepared by Lithuanian entities and by foreign entities that operate in Lithuania through a permanent establishment and that have income of more than €15 million during the tax period.
  • Previously, companies had to prepare a Local file if the company's income exceeded approximately €2.9 million. This threshold would be increased to €3 million under the draft order.
  • A taxpayer would be required to renew its Master file under the transfer pricing documentation rules every three years if all conditions of the controlled transaction remained unchanged.
  • A taxpayer would have to renew its benchmarking study with respect to a period complying with the requirements of the arm‘s length principle every three years, if the economic circumstances did not change significantly.
  • Data submitted in the documents relating to the controlled transaction would need to be updated each tax period.


Read a 2018 report prepared by the KPMG member firm in Lithuania

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in 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.

Connect with us


Request for proposal