Lithuanian tax authority intensifies real-time VAT checks, targets e-commerce and crypto

Key facts

• VMI collected over €45 million in the first months of 2024 from VAT fraud and evasion audits.
• Since September 2024, VMI reviews VAT declarations in real time, requiring businesses to fix discrepancies within 10 working days.
• Over 1 million residents have filed income tax declarations, with 700,000 declaring €330 million in personal income tax.
• About 200,000 residents, mostly self-employed, have not yet submitted their annual income declarations by the May 4 deadline.
• VMI targets construction, trade, auto sales, freight, e-commerce, remote work, social media activities, and virtual currency businesses.
• A specific dispute shows VMI may charge VAT even if export documents are complete, if the buyer resold goods before export.
• VMI recommends taxpayers engaged in commercial online activity ensure declaration accuracy and process traceability.
• On April 7, 2026, the tax filing system will be temporarily unavailable due to planned upgrades.

Deadline looms for 200,000 non-filers as VMI tightens enforcement

More than 200,000 Lithuanian residents have yet to submit their annual income declarations, with the May 4 deadline expiring at midnight. The State Tax Inspectorate (VMI) warns that late filers who owe tax will incur daily late-payment interest starting the next day. "The so-called last-day syndrome affects some residents, mostly those engaged in individual activities," said Martynas Endrijaitis, deputy head of VMI. He stressed that self-employed individuals must file even if they earned no income. VMI recommends filing online to avoid penalties, but many residents still queue at physical offices. Those without prior registration may wait weeks for an in-person appointment. The authority has already received declarations from over 1 million people, of whom 700,000 declared €330 million in personal income tax. However, about 52,000 property declarations are still pending.

Real-time VAT checks impose new burden on businesses

Since September 2024, VMI has been assessing VAT declarations in real time, a shift from traditional post-filing audits. Businesses must now correct discrepancies between their i.SAF registers and VAT declarations within 10 working days or provide a written explanation. Failure to comply can trigger a formal tax investigation. "This is no longer a recommendation but an obligation," said I. Ščeponienė, a VMI official. She noted that while discrepancies often arise from objective reasons such as credit invoices or cash-based accounting, the new procedure signals VMI's intent to react immediately rather than wait. Ščeponienė described the change as a potential opportunity for businesses to correct errors before severe actions, but acknowledged it adds administrative burden. The real-time system covers all VAT filers and is part of a broader digitalization push.

VMI recovers €45 million from VAT fraud, targets online sectors

In the first months of 2024, VMI recovered over €45 million from audits targeting VAT fraud and evasion. Traditional sectors such as construction, trade, auto sales, and freight remain under scrutiny. However, the authority is increasingly focusing on e-commerce, remote work, social media activities, and virtual currency businesses. "Businesses operating online have no reason to relax," Ščeponienė warned. She emphasized that the digital space is no longer a "grey zone" but a regularly monitored area. Common violations include unjustified application of the 0% VAT rate, incorrect VAT deductions, reverse charge breaches, undeclared VAT, errors in determining the taxable moment, vehicle taxation mistakes, failure to register as a VAT payer, and improper use of goods for private purposes.

Exporters face heightened scrutiny despite complete documentation

VMI is demanding more detailed information from exporting companies and those trading within the EU. Beyond proof that goods left the country or the bloc, inspectors now require data on the buyer's identity, representation, and actual business activity. "A mere promise that 'the goods left, we got the money' is no longer convincing," Ščeponienė said. A specific dispute illustrates the tough stance: even when a seller possessed all required export documents (CRM, export accompanying documents, customs certificates, and buyer confirmation), VMI assessed VAT if it emerged that the buyer had resold the goods before export. In such cases, the authority does not question the seller's good faith, contrary to European court practice. The final decision awaits a court ruling.

Self-employed and investment account holders face additional deadlines

Self-employed residents must file income declarations by May 4, but those with investment accounts have until June 1 to pay social insurance (Sodra) contributions related to those accounts. VMI also reminds taxpayers that they can allocate a portion of their personal income tax to support organizations until May 4. The process takes only a few minutes online. On April 7, 2026, the tax filing system will be temporarily unavailable due to planned upgrades, affecting submission of the GPM311 form. VMI advises taxpayers to plan accordingly.

VMI recommends robust internal processes to prove compliance

Even businesses confident in their legality must be prepared to prove it. For exports, a customs certificate confirming the completed export procedure is essential. If the buyer transports the goods, the seller must have supporting evidence such as the buyer's contract with a carrier. For intra-Community transactions, documents must include transport proof and information about the buyer, representatives, powers, and business nature. Ščeponienė stressed the need for internal rules governing document collection, storage, and accessibility, especially when staff changes occur. "Transparent internal communication is no longer a convenience but a necessity. One thing is clear: transparency must become practice, not a slogan. Because VMI is already in the next phase of the game," she said.

Outlook: stricter enforcement and digital oversight set to continue

VMI's real-time VAT checks and expanded focus on online businesses signal a permanent shift toward proactive enforcement. The authority's willingness to challenge even fully documented exports suggests a zero-tolerance approach to perceived tax avoidance. Businesses must adapt by strengthening their compliance frameworks, as the era of passive filing has ended. The coming months will test whether the new measures reduce fraud or simply increase administrative costs for honest taxpayers.

The bottom line

• VMI has recovered over €45 million from VAT fraud audits in early 2024, with e-commerce and crypto now in focus.
• Real-time VAT checks since September 2024 require businesses to fix discrepancies within 10 days or face investigation.
• Over 200,000 residents, mostly self-employed, missed the May 4 deadline and face daily late-payment interest.
• Exporters must provide detailed buyer information; even complete documentation may not shield against VAT assessments.
• VMI recommends internal document management rules to ensure compliance and avoid penalties.
• The tax filing system will be unavailable on April 7, 2026, due to upgrades.