Transfer pricing in Lithuania

Transfer pricing in Lithuania at a glance

Regulation Type OECD
Are there specific transfer pricing regulations? Yes
Submission deadline N/A
Submission deadline upon request 30 days
Annual update required No
Official language requirements English
Potential impact of penalties N/A

 

Lithuanian tax law

Rules for transfer pricing in Lithuania are based upon:

  • Law on Corporate Income Tax article 40
  • Order of the Minister of Finance No 1K — 123 as of 9 April 2004 on transfer pricing evaluation and documentation rules
  • Order of the Head of the State Tax Inspectorate No VA–27 as of 22 March 2005, on the associated party transaction disclosure in the annual corporate income tax return

OECD

Rules for transfer pricing in Lithuania are in line with the OECD Transfer Pricing Guidelines.

Methods

Accepted methods

Accepted methods are:

  • the comparable uncontrolled price (CUP) method
  • the resale price method
  • the cost plus method
  • the profit split method
  • the transactional net margin method

Priority of methods

Rules for transfer pricing in Lithuania specifically prefer the use of the CUP method or the other traditional transaction methods. The transactional profit methods can only be used when the traditional transaction methods are insufficient.

Documentation requirement

Information that should be included in the documentation:

  • Information relevant
 to the pricing of controlled transactions
  • Information on compliance with the arm’s length principle

Language

Rules for transfer pricing in Lithuania prescribe that all documentation should be provided in English.

Requirements to prepare documentation annually

Rules for transfer pricing in Lithuania do not provide for specific transfer pricing documentation to be prepared annually.

Submission deadline upon request by tax authorities

Upon request, documentation should be submitted within 30 days after a request has been made.

Advance Pricing Agreements

General

Since 1st of January 2012 it is possible to obtain for unilateral Advance Pricing Agreements (APA) in Lithuania. Bilateral or multilateral are sometimes also provided for.

Terms 

APA’s in Lithuania can not extend a period of five years. 

Penalties

Rules for transfer pricing in Lithuania do no provide for specific transfer pricing penalties.

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