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Accounting Services in Lithuania

In order to maintain records and obtain an overview of a company’s economic results and financial position, accounting is an essential element of the conduct of business.

Lithuanian accounting laws apply to all foreign-owned companies and their subsidiaries operating there. In order to ensure that the results of each company are comparable and understandable, there must be government-established accounting standards.

Accounting in Lithuania

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ADVANTAGES

  • Possibility of adding a remote accountant
  • Preparation of annual reports starting from 250 EUR
  • No need for Lithuanian employee, physical office and auditing
  • Possibility to restore the accounting of the whole period

The following legal acts regulate accounting in Lithuania:

  • Republic of Lithuania Accounting Law. In Lithuania, the law regulates how to organize an accounting system, how to write documents, how to store and how to correct them.
  • International accounting standards or business accounting standards are both generally accepted accounting standards. According to what the activity entails, either Business Accounting Standards (BAS) or International Accounting Standards (IAS) will be applied.
  • In Lithuania, a law governs the preparation of company financial statements. Audits, reports on government payments, and consolidated annual reports are regulated by law.

Accounting policies should be approved by the head of the company. This is done keeping in mind the specific type of activity, the business environment, and the application of Accounting Standards in mind. Several accounting policies should be included in the accountant’s policies, including the organization’s accounting policies as well as financial statement preparation and presentation.

It is required that all accounting records be backed up by supporting documentation (invoices, checks, accounting records, expenditure reports, etc.).

There is a 10-year retention period for accounting records. A financial statement can only be prepared properly if both assets and liabilities have been inventoried at least once a year. This is most likely by the end of the financial year.

BASIC REQUIREMENTS FOR THE ORGANISATION OF ACCOUNTING

  • The Lithuanian Register requires every company to prepare and submit its annual report within 5 months of its financial year.
  • There is no set month for the start of a financial year
  • It is not possible for the company’s head to handle accounting.
  • Accounting programs must be used to record all business transactions.
  • It is essential to document every business transaction.
  • A company’s financial situation, performance, and cash flows should be presented in a reliable, objective, and comparable manner.
  • Documents related to accounting must be archived for a minimum of ten years.

ANNUAL FINANCIAL REPORT

  • Even companies without any activities during the financial year are required to file annual reports in Lithuania.
  • The annual report must be approved at the Annual General Meeting after the end of the financial year.
  • There must be 12 consecutive months in the financial year, usually starting on the first of January. However, it can start at any time during the calendar year.
  • After a general meeting, the Lithuanian Centre of Registers must receive the annual report.

After 12 consecutive months, the company’s books of accounts are closed and financial statements are prepared, and the financial year starts at any month in the calendar year. It is normal for Lithuanian companies to have the same financial year as the calendar year.

An annual report must be submitted by each Lithuanian company within six months after the end of its financial year to the Lithuanian Business Register. Unless otherwise specified, the annual report must be prepared in Lithuanian and in the official currency of Lithuania (Euro).

Every company registered in Lithuania is required to file an annual report, even if it didn’t conduct any business during the year. If your company’s financial year ends on 31 December, the deadline for the annual report is 30 June of the following year. This means that if the financial year ends on 31 December, the deadline is 30 June.

The annual report must be prepared after all accounting has been completed.

The annual report should include the following:

  • Management Report
  • Balance
  • Income statement
  • Cash flow report
  • Report on changes in capital
  • Notes to annual accounts

What must be included in the annual report, depending on the company type:

Companies exceeding at least two of the following indicators must under Lithuanian law have their annual reports audited:

  • Net turnover 3, 500, 000 EUR
  • Value of the assets 1, 800, 000 EUR
  • Number of employees, 50 persons

The Legal Entities Register publishes annual financial reports and the auditor’s report. Information obtained through an audit must remain confidential and certified auditors are liable in the event that their duties are violated.

Social indicators in Lithuania in 2022

Evaluation parameters   Numbers
Minimum monthly wage (MMA) 730 EUR
Minimum hourly wage 4,47 EUR
The basic amount of 2022 applied in the calculation of the salaries of public politicians, judges, civil servants and civil servants. 181 EUR
Unemployment rate in 2022 5,2%
Number of unemployed in 2022 79,3 thousands
Minimum unemployment benefit for social insurance 169,87 EUR
Maximum social insurance benefit for unemployment Could not be over 58.18 per cent. National average wage.
Average social insurance benefit per month in 2022. 458,2 EUR
Basic State Social Insurance Pension 225,84 EUR
Public pension base 65,29 EUR
Basic State Social Insurance Pension for Widows 32 EUR
Average old-age pension per month in 2022 483,25 EUR
Average old-age pension per month with compulsory social security in 2022. 512,70 EUR
Evaluation parameters Numbers
Value of pension unit of account 4,94
Basic pension index for 2022 1.0847
2022 coefficient of additional indexation of the individual social pension

 

 1.0424
Index rate of supplementary social insurance pensions 1,05
Coefficient of additional indexation of state pensions of officers and soldiers and judges 1,05
Government-supported income 147 EUR
Basic social security benefit 46 EUR
Salpa Pension Base 173 EUR
Targeted remuneration base 138 EUR
National average wage applied to insured persons in 2022 to calculate the contribution base state social insurance 1504.1
15-64 years of age employment rate in 2022. 75,2%
male employment rate 75,2%
women employment rate 75,3%
Average wages in the national economy (excluding companies) in 2022.

 

 

 gross 1780,5 EUR
chain 1116,2 EUR
Magnitude of minimal consumers first person 267 EUR
second person 214 EUR
Evaluation parameters Number
needs of cooperatively residents for the third and subsequent cohabitants 187 EUR

Accounting services are provided by Company in Lithuania UAB to Lithuanian companies with and without VAT numbers. Our expertise in different segments of business enables us to provide our clients with services such as the registration of VAT numbers in Lithuania, the issuance of EORI numbers, and the preparation of annual reports. With the help of our specialists, you can also obtain a financial license.

FREQUENTLY ASKED QUESTIONS

  • Do all companies need to keep their company accounting in Lithuania?
    Tax and Board as well as Social Insurance departments require all Lithuanian companies to submit reports. Keeping the accounting of a company in the correct order requires the appointment of an experienced accountant.
  • Does my Lithuanian company allow me to handle accounting?
    No, accounting can’t be handled by the head of the company. An accountant is required for every Lithuanian company in order to prepare and submit the government's required financial reports. Accounting entries are the responsibility of an employed accountant, a company, or a person who provides accounting services.
  • Which permissions are required to grant an accountant access to the Tax and Customs Board of Lithuania?
    Using a power of attorney/application, you can grant us access to your accounting records. Upon registration of the company, we can supply you with a POA template that you need to fill out, sign, and send to the Tax and Customs Board.
  • Do Lithuanian source documents need to be in a specific language?
    Accountants can accept documents in different languages. Depending on the content of the source documents, you may be contacted. During the preparation of financial statements, Lithuania uses the euro as its official currency.
  • Could you please let me know how I can provide the documents to the Lithuanian accountant?
    You must send all the documents of your company to the accountant via email after concluding an agreement with us for accounting services.
  • What is the deadline for providing the documents to the Lithuanian accountant?
    The customer is required to provide the statements for the previous month by the 5th day of the month. The bank statement must match all incoming and outgoing invoices. Partner details and a description of the invoice must be included on all incoming and outgoing invoices.
  • How should a Lithuanian company submit a bank statement?
    PDF and XML formats are allowed for bank statements. A clear, legible statement dated from the 1st to the last day of the month should be included in this letter.
  • How soon must Lithuanian monthly reports be submitted?
    Until the 15th of every month, employees must submit their employee declarations. VAT declarations should be submitted until 25th of every month.
  • Is it necessary to file an annual report in Lithuania every year?
    In fact, yes. Annual reports are required for every company registered in Lithuania. Even companies with no activity during the financial year.
  • How long does it take for Lithuanian companies to submit their annual reports?
    The report should be submitted within five months of the end of the financial year. Lithuanian Center of Registers requires Shareholders to confirm and submit an annual report.
  • The Lithuanian company's accounting costs are affected by what factors?
    Accounting prices are determined by VAT availability. A company's responsibilities, employees, and the amount of processed documents can also affect the cost.
  • In Lithuania, what is the cost of accounting services?
    Accounting service of companies without a VAT number start from 100 EUR / month Accounting service of companies with a VAT number start from 150 EUR / month
  • Does a Lithuanian company have the option of ordering accounting services for previous financial periods?
    Depending on the number of transactions for the relevant financial period, the price will vary. A Lithuanian accountant needs all the documents and statements in their entirety.
  • What is the purpose of keeping accounting records for my company?
    The law requires it. A company in Lithuania has to provide reports to Tax Inspectorate, Social Security Fund, Department of Statistics, Centre of Registers, Customs Department and migration offices. Tax evasion or non-compliance with annual report requirements will lead to problems with the authorities.
  • Accounting reports are required for what types of companies?
    Lithuanian companies are required to submit reports. Heads of companies cannot handle accounting. Each Lithuanian company must have an accountant who will assist in preparing the necessary reports and submitting them to the state authorities. In addition, the accountant will provide advice on what taxes one must pay.
  • Lithuanian annual reports: what are they?
    A company's annual report provides information about its performance for shareholders and other interested parties. Profit and loss statements and balance sheets are mandatory components of the annual report.
  • Are annual reports required for every company?
    That's right. An annual report is required for every company registered in Lithuania. It does not matter if the company was inactive for the entire financial year.
  • Lithuanian annual reports are due by what date?
    Every year, no later than five months after the end of the financial year. It is mandatory for Shareholders to confirm and submit an annual report to the Lithuanian Centre of Registers.
  • Is a VAT number required for my company?
    VAT registration is required by the company for the following reasons:
    • a) when the volume of sales exceeds 45, 000 EUR for 12 months
    • b) when the volume of purchase in EU exceeds 14, 000 EUR
  • Does a company with a turnover under 45, 000 EUR have to register for taxation?
    A shareholder (participant) with 50% or more shares in another company must combine the profits and purchases made from the EU over the past 12 months (if the shareholder engages in natural person activities, his income as a natural person is also included).
  • What is the need for an audit of my company?
    At least two of these indicators need to be met in order for an annual report to be audited:
    • 1. Net turnover 3, 500, 000 EUR
    • 2. Value of the assets 1, 800, 000 EUR
    • 3. Number of employees 50 persons
  • In Lithuania, who is in charge of accounting?
    The accuracy of accounting entries is the responsibility of an employee accountant, a company, or a person who provides accounting services. It is not possible for the company's head to handle accounting. Accountants are required to assist Lithuanian companies in preparing and submitting government reports.
  • For a Lithuanian company, what factors affect the cost of accounting services?
    VAT availability determines the price of accounting. Additionally, the cost can vary depending on the number of processed documents, the number of employees, and other company responsibilities.

Additional Information/BLOG:

International Tax Advice in Lithuania
Tax System in Lithuania
What Taxes Must Be Paid If the Board Member Is a Foreigner in Lithuania
Taxation of Non-Residents in Lithuania
Tax Benefits in Lithuania
EORI Number in Lithuania
International Tax Advice in Lithuania
Annual Report for Companies in Lithuania
Cryptocurrency Taxation in Lithuania
Taxes in Lithuania

Jekaterina Alsmit

Corporate Tax Services Manager

+370 661 75988
[email protected]

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