Transfer pricing documentation

Lithuania: 1 January 2017: Missing transfer pricing documentation? Fines for Managers and Companies.

Companies not possessing the necessary transfer pricing documentation faced new consequences from 1 January 2017. The Code of Administrative Offences lays down fines of EUR 1 400 to 4 300 for the first infringement and EUR 2 900 to 5 800 for a repeated infringement to be imposed upon persons responsible for such documentation (e.g. managers, financial directors).

Additionally, the company may be liable for tax arrears (penalty from 10 to 50 %) plus interest (0.03 % daily).

The main purpose of transfer pricing is to allocate a profit tax base for a company’s place of business activity. Transfer pricing is obligatory for companies that have:
– Turnover of more than EUR 2 896 200 EUR a year and
– transactions with related persons (e.g. shareholders, subsidiaries)

Every company that falls within the transfer pricing rules should check whether transfer pricing documentation is in place.

If unsure whether transfer pricing rules apply to your company, it is always possible to apply to the tax authorities for a binding ruling.

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