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Lithuania – COVID-19: Travel Restrictions and Tax Filing, Social Security Extensions

Lithuania – COVID-19: Travel Restrictions and Tax Filin

The Lithuanian government and tax authorities imposed quarantine restrictions and extended the tax filing deadlines in response to the coronavirus (COVID-19) pandemic.

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In response to the coronavirus (COVID-19) pandemic, the Lithuanian government and tax authorities extended the deadline for submission of the 2019 Lithuanian income tax return for individuals to 1 July 2020 (from 4 May 2020).1  To control the spread of COVID-19, the Lithuanian government established a quarantine effective 16 March 2020 until 30 March 2020.2

WHY THIS MATTERS

Due to the deferred deadline for submission of the annual returns, individuals should have more time to prepare and submit their Lithuanian income tax returns for 2019 given the current restrictions. Businesses may also defer payment of taxes without delay interest or penalties.

The travel restrictions will have immense impact on internationally-mobile individuals as well as their family members. Considering the applicable restrictions, individuals should return (if they need to) to their country of residence as soon as possible since it could become impossible to do so in the near future.

Tax Authority Announcements

In addition to the return filing extension, the tax declaration season will not be initiated at least until April. The electronic version of the new annual income tax return (form GPM311), that will apply for reporting income received in 2019, will not be released until at least April 2020. Based on the previous information from the tax authorities, the new electronic form along with pre-filled tax returns should have been released in the beginning of March.

Furthermore, the Lithuanian tax authorities have published a list of taxpayers (individuals and companies) who were directly affected by the consequences of COVID-19. 3 The following reliefs will automatically apply to these taxpayers:

—   Suspended recovery of tax under-payments (from 16 March 2020 until the end of restrictions);

—   Relief from penalties and late payment interest (from 16 March 2020 until end of restrictions);

—   Possibility to apply for tax instalment (loan) agreement to defer tax under-payments (interest-free).

The aforementioned reliefs will apply to all taxes collected by the tax authorities, as well as social security contributions. Taxpayers not included in the list although affected by the COVID-19, may apply to become eligible for these reliefs as well. 

Movement of Individuals

During the quarantine period, cross-border movement of individuals will be restricted:

—   Foreigners will not be able to enter to Lithuania, unless they have  permission to reside in Lithuania (certain other exceptions also apply);

—   Lithuanian nationals will not be able to leave Lithuanian unless they leave their country of residence or work (certain other exceptions also apply);

—   Individuals returning to their country of residence are allowed to transit through Lithuania without a stop-over until 26 March 2020, 00:00;

—   Free movement of goods is not restricted.

FOOTNOTES

1  Notification (in Lithuanian) form the Lithuanian tax authorities regarding extended deadline for submission of the 2019 Lithuanian income tax return.

2  Government announcement 15 March 2020. 

3  Notification (in Lithuanian) from the Lithuanian tax authorities regarding relief for businesses affected by COVID-19.

* Please note the KPMG International member firm in the United States does not provide immigration or labour law services. However, KPMG Law LLP in Canada can assist clients with U.S. immigration matters.

 

The information contained in this newsletter was submitted by the KPMG International member firm in Lithuania.

© 2021 "KPMG Baltics", UAB, a Lithuanian limited liability company and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

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Flash Alert is an Global Mobility Services publication of KPMG LLPs Washington National Tax practice. 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.

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