Accounting Services for Cryptocurrency Companies

Accounting is an obligatory requirement in the conduct of activities on behalf of a Lithuanian company. All companies and subsidiaries of foreign companies operating in Lithuania are subject to accounting from the moment of first registration.

Company in Lithuania UAB offers accounting services for companies engaged in crypto activities. According to the Law on Corporate Income Tax and the Law on Personal Income Tax, «Virtual currency» is a negotiable asset that can be used as a means of payment for goods and services. On the VAT side, the virtual currency is considered to be the same currency as the euro.

Income received in virtual currency shall be taxed in the same way as income received in traditional currency. For the purpose of taxation, the virtual currency purchase and sale price or the income received shall be converted into euros based on the current exchange rate (market price) on the date of transaction or on the date of receipt of income. The source of the published virtual currency rate used in accounting should be recorded in the internal accounting rules.

Accounting is an obligatory requirement in the conduct of activities on behalf of a Lithuanian company. All companies and subsidiaries of foreign companies operating in Lithuania are subject to accounting from the moment of first registration.

TAXATION OF CRYPTOCURRENCY TRANSACTIONS

With regard to virtual currency, taxable income may arise as follows:

  • Selling of virtual currency

From the point of view of Lithuania’s corporate income tax, at the moment of production of the virtual currency tax does not arise. A tax arises when a virtual currency is sold. Taxable income is calculated by subtracting the value of production/acquisition of virtual currency from the sale price. The documents supporting the costs on which the costs are based should contain all the required accounting particulars.

  • Exchange for a traditional FIAT currency

According to Court of Justice other European Union in case C-264/14 the sale of a virtual currency (exchange for a traditional FIAT currency) is regarded as a sale of services for a fee. Which means the exchange of virtual currency is subject to VAT.

  • Brokering services are provided for tokens considered as coupons

The issuance of tokens (considered as a security) is neither a supply of goods nor a service, so VAT is not subject to. Since according to Article 3 of the Law on VAT only the supply of goods and/or services is carried out in Lithuania, VAT is subject to.

If brokering services are provided for tokens considered to be securities, such brokering services provided in Lithuania pursuant to provisions of Article 28(5) of the Law on VAT, exempt from tax. If brokering services are provided for tokens considered as coupons, such brokering services provided in Lithuania are taxed using the standard VAT rate.

It is necessary to record the amount of fiat money received and the amount of cryptocurrency assets acquired during each month. All the company’s cryptocurrency assets shall also be recorded in terms of euros on a monthly basis.

The cost of accounting services provided to a cryptocurrency company depends on the number of transactions, documents to be processed and the number of company employees. Each company registered in Lithuania obligated to have at least one employee in accordance with Laws of Lithuania.

Monthly accounting fee for crypto companies:

up to 10 documents per month 200 EUR / month
11 to 30 documents per month 250 EUR / month
31 to 70 documents per month 300 EUR / month
71 + documents per month on an individual basis
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