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Lithuania: New transfer pricing documentation requirements in 2019

Lithuania: Transfer pricing documentation requirements

New transfer pricing documentation requirements apply in Lithuania beginning in 2019.

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The new transfer pricing documentation requirements were introduced 31 December 2018, and apply to related-party transactions conducted in 2019 and subsequent years. The new requirements generally reflect measures implementing recommendations under the OECD’s base erosion and profit shifting (BEPS) project.

Among the measures relating to the transfer pricing documentation rules are the following:

  • The definition of a “group of entities” has been expanded.
  • There are new turnover thresholds. The taxpayer will be required to prepare the:
    • Master file – if turnover exceeds €15 million and the taxpayer is part of an international group
    • Local file – if turnover exceeds €3 million
  • Exemptions for low-value transactions have been introduced. Transfer pricing documentation will not be required if a controlled transaction or the sum of controlled transactions during the financial year does not exceed €90,000 per related party.
  • Deadlines for preparing transfer pricing documentation have been set. The documentation must be prepared by the 15th day of the sixth month after the financial year-end.
  • Updates of transfer pricing documentation can be made every three years if the conditions and circumstances of the underlying transactions remain unchanged. The data of controlled transactions must be updated annually.
  • Sanctions for non-compliance with new requirements have been tightened. Non-compliance with the transfer pricing documentation requirements will result in a penalty ranging from €1,820 to €5,590, and the penalty for repeated violations will range from €3,770 to €6,000.

 

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

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