Lithuania: PIT reporting – the first step towards more effective tax collection.
Recently there has been a noticeable increase in the visibility of the State tax inspectorate (STI) in the media. The main reason for this is the appointment of a new head of the STI – Dainoras Bradauskas. Although he has temporarily served in this position since July 2014, his permanent appointment has certainly increased his responsibility and expectations. This can be verified by the publicly expressed position of the Minister of Finance that the new head of the STI will improve tax collection.
One of the mentioned aims of improving the system is towards more effective Personal Income Tax (PIT) collection. In order to succeed, the intention is to increase the extent of data exchange between tax administrators in other countries and to obtain more information on the income received and assets owned by natural persons in foreign countries.
The deadline for filing PIT returns for 2014 is 4 May 2015. Until this date both Lithuanian and foreign persons who have received income is taxable in Lithuania should report and pay PIT due. However, it is not unusual for this obligation either to be forgotten or not taken seriously enough.
Increased PIT reporting and payment control is expected to be one of the first steps of the new head of the STI towards more effective tax collection. Therefore, before the deadline comes it should not be forgotten:
- to inform employees about the deadline for filing their PIT return, especially focusing on those that have received other than employment-related income;
- if a company permanently or temporarily employs foreign natural persons – to inform them of their obligations arising in Lithuania and to assist in fulfilling it;
- to draw the attention of employees that have received income in foreign countries in 2014 about their reporting obligations in Lithuania and the risk of taxation of income received abroad.
Do you need assistance when assessing the obligations of employees? Do you have questions about whether certain types of income should be taxed? Do you consider whether the obligations of foreign employees have been identified properly? Feel free to contact us and we will be more than happy to assist.