Transfer pricing in Lithuania at a glance
|Are there specific transfer pricing regulations?||Yes|
|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
Rules for transfer pricing in Lithuania are in line with the OECD Transfer Pricing Guidelines.
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.
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
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
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.
APA’s in Lithuania can not extend a period of five years.
Rules for transfer pricing in Lithuania do no provide for specific transfer pricing penalties.