Business Services for E-Commerce Companies in Lithuania

AT A GLANCE

A Lithuanian UAB gives e-commerce businesses a full EU legal entity — enabling EU VAT registration, access to SEPA payment infrastructure, and cross-border selling to EU consumers under a single registration.
The EU One Stop Shop (OSS) scheme allows a Lithuanian e-commerce company to report and pay VAT for all EU member states through a single quarterly return filed with VMI — eliminating the need for separate VAT registrations in each country.
We provide four service areas for e-commerce businesses: accounting, legal services, customs and import/export compliance, and payment gateway compliance advisory.
Import VAT, customs classification, and IOSS registration for non-EU sellers are areas where e-commerce companies consistently face unexpected liability — we advise on all three before the first shipment, not after the first audit.
Payment gateway compliance — PSP agreements, chargeback procedures, and PCI-DSS obligations — is one of the most overlooked legal risks for growing e-commerce operators.

E-commerce businesses operating from Lithuania need accounting, legal, and compliance support calibrated specifically to cross-border digital commerce — not to a standard commercial company. The key differences are: EU VAT compliance including OSS and IOSS registration; customs and import obligations for goods shipped internationally; consumer protection law requirements for online retail; and payment gateway compliance including PSP agreements and chargeback management. We provide all four service areas under one engagement, in English, for foreign-owned Lithuanian e-commerce companies selling to EU and global markets.

Why E-Commerce Businesses Register in Lithuania

For e-commerce operators selling into the EU market — whether goods, digital products, or services — a Lithuanian company provides something that no non-EU entity can offer: a genuinely EU-domiciled legal entity with access to the EU VAT system, EU payment infrastructure, and EU consumer rights framework from a single registration.

EU market access under a single entity

A Lithuanian UAB can sell to consumers and businesses across all 27 EU member states without additional country-by-country registrations for standard commercial activities. For marketplace sellers on Amazon EU, Zalando, or other pan-European platforms, a Lithuanian entity is fully accepted as an EU seller, enabling access to EU-only fulfilment programmes and EU seller ratings. For direct-to-consumer e-commerce websites, a Lithuanian company enables EU-compliant invoicing, EU consumer protection compliance, and access to EU payment processing without the complications that arise from non-EU entities attempting to transact in the EU market.

OSS — one VAT registration for the whole EU

The EU One Stop Shop (OSS) is the single most important VAT development for cross-border e-commerce operators in the past decade. Before OSS, an e-commerce business selling to consumers in multiple EU countries was required to register for VAT in each country where sales exceeded the local threshold. OSS replaces this with a single registration in Lithuania — from which all EU cross-border B2C VAT is reported and paid in a single quarterly return filed with VMI. For a business selling to consumers in ten EU member states, OSS replaces ten separate VAT registrations with one Lithuanian registration. The administrative saving is substantial.

Competitive corporate tax environment

Lithuania’s 15% standard corporate income tax rate — reduced to 5% for qualifying small companies — applies to the net profit of the Lithuanian e-commerce entity. For companies that manufacture or source goods outside Lithuania and sell them to EU consumers, the Lithuanian entity’s margin on the transaction is taxed at these rates. Combined with Lithuania’s 55+ double taxation treaty network, the structure is tax-efficient for companies with international supply chains.

SEPA and EU payment infrastructure

A Lithuanian company can open accounts with Lithuanian banks and EMIs that connect directly to the SEPA payment network. For e-commerce businesses that collect payments from EU consumers and pay EU suppliers, operating within the SEPA zone eliminates currency risk, reduces transaction costs, and simplifies reconciliation. Several leading e-commerce payment processors — including Stripe, Adyen, and local Lithuanian EMIs — provide seamless integration for Lithuanian entities.

OSS threshold

EU OSS applies once a business’s total cross-border B2C digital services or goods sales to EU consumers exceed €10,000 annually across all EU member states combined. Below this threshold, VAT is charged at the Lithuanian rate and declared through the standard Lithuanian VAT return. Above the threshold, OSS registration is recommended — and for most active e-commerce businesses, this threshold is crossed quickly. We advise on OSS registration and file quarterly OSS returns as part of our e-commerce accounting service.

Our Services for E-Commerce Companies

We provide four specialist service areas for e-commerce businesses operating from Lithuania. Each addresses a specific compliance challenge that standard commercial accounting or legal services do not fully cover for cross-border online retail.

Accounting Services for E-Commerce

E-commerce accounting is more complex than standard bookkeeping — multi-currency transactions, OSS VAT reporting for 27 EU member states, IOSS for non-EU goods imports, marketplace fee reconciliation, and inventory cost accounting all require specialist treatment. We provide e-commerce-specific accounting on a fixed monthly retainer, with OSS and IOSS filings included as standard for VAT-registered companies.

Monthly bookkeeping — multi-currency transactions, marketplace fees, payment processor reconciliation
Lithuanian VAT return — monthly or quarterly, including domestic sales and cross-border B2B transactions
EU One Stop Shop (OSS) quarterly return — consolidated cross-border B2C VAT for all EU member states
IOSS (Import One Stop Shop) return — for non-EU goods sold to EU consumers below the €150 customs threshold
Inventory and cost of goods accounting — including stock valuation, write-offs, and supplier invoice processing
Annual financial statements and CIT return — with e-commerce revenue recognition and returns/refund treatment
Monthly management report — revenue by channel and geography, margins, VAT position, and cash flow

Legal Services for E-Commerce

E-commerce legal work centres on the relationship with consumers — and EU consumer law is among the most protective in the world. Terms and conditions that do not comply with the EU Consumer Rights Directive are unenforceable. Returns policies that do not reflect the 14-day statutory right of withdrawal create liability. Privacy policies that do not comply with GDPR expose the company to regulatory action. We prepare and maintain the complete legal documentation framework for EU-compliant e-commerce operations.

Terms and conditions — EU Consumer Rights Directive compliant, covering purchase process, pricing, delivery, and cancellation
Returns and refund policy — reflecting the 14-day right of withdrawal and the conditions for exclusions
Privacy policy and GDPR documentation — for e-commerce companies processing EU consumer personal data
Supplier and manufacturer agreements — governing product sourcing, quality standards, and liability allocation
Marketplace seller agreements — reviewing and advising on terms from Amazon, Zalando, and other EU marketplaces
Distance selling compliance — pre-contractual information requirements under the EU Consumer Rights Directive
Product liability framework — advising on product safety obligations and liability exposure for imported goods

Customs and Import/Export Compliance

Cross-border e-commerce involving physical goods triggers customs obligations that catch many operators unprepared — import VAT, customs duties, tariff classification, and origin documentation all have direct cost and compliance implications. For e-commerce businesses importing goods into the EU from non-EU suppliers, or exporting goods from Lithuania to non-EU customers, the customs framework must be understood before the first shipment arrives — not discovered after a customs hold or an unexpected duty bill.

Customs duty and tariff classification advice — identifying the correct HS commodity code and applicable duty rate for your products
Import VAT planning — understanding when import VAT is due and how it can be reclaimed as input VAT
IOSS registration — for non-EU sellers importing low-value goods (below €150) to EU consumers; eliminates import VAT at the border
Customs valuation advice — how to correctly declare the customs value of imported goods
Country of origin documentation — advising on origin rules and the documentation required for preferential duty rates
Export compliance — export licensing requirements, dual-use goods assessment, and export documentation
Intrastat reporting — statistical reporting obligations for Lithuanian companies moving goods within the EU
Customs agent introduction — referrals to licensed customs brokers for practical import/export handling

Payment Gateway Compliance Advisory

Payment processing is the operational core of any e-commerce business — and the legal and compliance framework around it is more complex than most operators expect. PSP agreements contain liability clauses that shift chargeback exposure directly onto the merchant. PCI-DSS compliance obligations apply to any merchant that stores, processes, or transmits cardholder data. Strong Customer Authentication (SCA) under PSD2 affects conversion rates. We advise e-commerce companies on navigating payment gateway compliance from PSP selection through to ongoing chargeback management.

PSP agreement review — identifying liability clauses, reserve requirements, and chargeback thresholds before signing
Payment gateway selection advisory — comparing PSPs for e-commerce use cases on fee structure, SCA support, and settlement terms
Chargeback management framework — documented procedures for responding to chargebacks within the PSP's dispute window
PCI-DSS compliance guidance — assessing the applicable PCI-DSS SAQ level and the steps required to achieve compliance
Strong Customer Authentication (SCA/3DS2) — advising on SCA implementation and its impact on checkout conversion
Payment flow legal review — ensuring the payment flow description on the website correctly reflects the transaction structure
Recurring billing and subscription compliance — legal requirements for subscription products under EU consumer law
Payment dispute and fraud advisory — advising on the legal framework for disputed transactions and fraud prevention obligations

EU VAT for E-Commerce: OSS, IOSS, and What You Need to Know

EU VAT compliance is the area where e-commerce operators face the most significant and most avoidable exposure. The rules have changed substantially since 2021 — when the OSS and IOSS schemes replaced the previous distance selling thresholds — and companies that are still operating under the old framework are almost certainly non-compliant.

The pre-2021 problem

Before July 2021, each EU member state had its own distance selling threshold — the level of B2C sales above which a foreign e-commerce company was required to register for VAT locally. Most countries set thresholds between €35,000 and €100,000. Companies that exceeded these thresholds without registering accumulated VAT liabilities in multiple countries simultaneously, often without realising it. The pre-2021 system was widely non-compliant.

OSS — the current framework for B2C digital and physical goods

From July 2021, the OSS scheme replaced the distance selling thresholds for cross-border B2C sales. A Lithuanian e-commerce company selling to consumers in France, Germany, Poland, and Spain no longer needs separate VAT registrations in each country — it registers for OSS with VMI and reports all four countries’ sales in a single quarterly OSS return, paying the VAT owed to each country in a single payment to VMI, which then distributes the funds to the relevant tax authorities.

OSS covers: intra-EU cross-border supplies of goods dispatched from Lithuania to EU consumers; cross-border B2C services where the place of supply is determined by the consumer’s location; and digital services (downloads, subscriptions, streaming) delivered electronically to EU consumers.

IOSS — for goods imported from outside the EU

The Import One Stop Shop (IOSS) applies to goods imported from non-EU countries with a value below €150, sold directly to EU consumers. Under IOSS, the e-commerce seller registers for IOSS in Lithuania, collects VAT from the consumer at the point of sale at the consumer’s country VAT rate, and remits it through a monthly IOSS return. The goods then clear customs without import VAT being levied at the border — speeding up delivery and reducing the friction of surprise charges for consumers.

Companies that sell low-value goods from non-EU warehouses (including China, Hong Kong, and the UK) to EU consumers are required to either register for IOSS or ensure their logistics provider handles the customs clearing under a different mechanism. Non-compliance means consumers face import VAT charges at the border — which generates disputes, returns, and negative reviews. We handle IOSS registration and monthly returns as part of our e-commerce accounting service.

What happens without OSS/IOSS compliance

A company that is selling cross-border to EU consumers without OSS or IOSS registration is accumulating VAT liabilities across multiple member states. EU member states are increasingly exchanging data with each other and with digital marketplace operators to identify non-compliant sellers. Enforcement actions against non-registered cross-border sellers are rising. The liability is not just the unpaid VAT — it includes penalties, interest, and in some member states, personal liability for company directors.

Scheme	Who It Applies To	What It Covers	Return Frequency
OSS (Union scheme)	EU-based businesses selling cross-border B2C within the EU	Goods dispatched from EU + B2C digital services to EU consumers	Quarterly
IOSS	Sellers of goods imported from non-EU countries, value ≤ €150	Low-value goods sold to EU consumers from non-EU warehouses	Monthly
Standard Lithuanian VAT	All Lithuanian VAT-registered companies	Domestic Lithuanian sales + B2B cross-border EU transactions	Monthly or quarterly
OSS (non-Union)	Non-EU businesses with no EU establishment	Digital services to EU consumers only	Quarterly

EU Consumer Protection: What E-Commerce Companies Must Comply With

Selling to EU consumers — whether from a direct website or through a marketplace — triggers a set of consumer protection obligations that apply regardless of where the seller is incorporated. For a Lithuanian company selling to EU consumers, these obligations are imposed by Lithuanian law implementing EU Directives, and they apply to every sale to an EU consumer.

The 14-day right of withdrawal

Every EU consumer who purchases goods or digital services online has a statutory right to withdraw from the contract within 14 days of receiving the goods (or of concluding the contract, for services) — without giving any reason and without penalty. The seller must refund the full purchase price, including the original delivery charges, within 14 days of receiving the returned goods. The right of withdrawal applies to most consumer purchases — with specific exceptions for perishable goods, personalised items, digital content downloaded with the consumer’s consent, and certain other categories.

A returns policy that does not reflect the 14-day right of withdrawal is legally unenforceable — the statutory right applies regardless of what the website says. We draft returns policies that correctly state the statutory right while clearly communicating the seller’s practical process for handling returns.

Pre-contractual information obligations

Before an online consumer purchase is completed, the seller must provide a specific set of pre-contractual information — including the seller’s full legal name and registered address, the total price including VAT and delivery, delivery timelines, payment methods, the right of withdrawal and how to exercise it, the duration of the contract if applicable, and complaint and dispute resolution procedures. Failure to provide this information correctly can extend the withdrawal period to up to 12 months.

Digital Services Act (DSA) obligations

The EU’s Digital Services Act imposes additional obligations on online marketplaces and platforms operating in the EU. Lithuanian e-commerce companies operating their own marketplace — where third-party sellers list and sell products — are subject to DSA requirements including trader verification, traceability obligations, and notice-and-action procedures for illegal content. We advise on DSA applicability and the steps required for compliance.

Customs and Cross-Border Goods: Key Obligations

For e-commerce businesses that source physical goods from non-EU suppliers — China, Vietnam, Turkey, the UK, the US — and sell them to EU consumers, the customs framework creates cost and compliance obligations that must be understood at the business model design stage, not discovered after the first large shipment arrives.

Customs duties

Goods imported into the EU from non-EU countries are subject to customs duties — charged as a percentage of the customs value of the goods. The duty rate depends on the commodity code (HS code) of the goods, the country of origin, and whether any preferential trade agreements apply. Duty rates vary widely: textiles from China may attract duties of 12%, while electronics attract 0–3.7%. Incorrectly classifying goods under the wrong HS code — which happens frequently when commodity codes are assigned without specialist advice — results in either overpayment of duties or, more seriously, underpayment that becomes a customs liability on audit.

Import VAT

In addition to customs duties, goods imported into the EU are subject to import VAT at the applicable rate of the country of import — in Lithuania, 21%. Import VAT is paid by the importer of record at the time of customs clearance. For VAT-registered businesses importing goods for resale, import VAT can be reclaimed as input VAT in the Lithuanian VAT return — but only if the import VAT certificate (C79 equivalent) is correctly obtained and the goods are used for VATable business activities. Companies that import goods for resale without a Lithuanian VAT number cannot reclaim import VAT, making every import more expensive by 21%.

IOSS for marketplace sellers

If you sell low-value goods (below €150) through a marketplace such as Amazon or eBay, the marketplace may collect and remit IOSS VAT on your behalf — but only if the marketplace has an IOSS registration and your goods are stored outside the EU before sale. If you ship goods from a non-EU warehouse directly to EU consumers through your own website, you must have your own IOSS registration. We clarify the correct IOSS structure for each e-commerce business model and register the company for IOSS with VMI.

Frequently Asked Questions

No — this is precisely what the OSS scheme was designed to prevent. If your company is registered for OSS with the Lithuanian VMI, you report and pay VAT for all EU member states through a single quarterly return. You do not need separate VAT registrations in France, Germany, Poland, or any other EU country where you make B2C sales, provided those sales are made from Lithuania (or another EU country where you are OSS-registered). Local VAT registrations in other EU countries are only required where you store goods in fulfilment centres in those countries — for example, under Amazon’s FBA programme — which creates a fixed establishment triggering a local registration obligation.

The OSS threshold is €10,000 in total cross-border B2C sales to EU consumers across all member states combined, within a calendar year. Once this threshold is crossed, OSS registration is required for subsequent sales. Below the threshold, you charge Lithuanian VAT on all B2C EU sales and declare them on the standard Lithuanian VAT return. If you exceed the threshold without registering for OSS, you are technically required to register for VAT in each EU country where your sales exceed that country’s applicable rate — a significantly more burdensome outcome. We register clients for OSS at or before the threshold and handle all quarterly OSS filings.

Yes. Digital services — software downloads, e-books, streaming, SaaS subscriptions, and online courses — sold to EU consumers are subject to VAT at the consumer’s country rate, regardless of where the seller is based. This has applied since 2015 and was integrated into the OSS framework in 2021. A Lithuanian company selling a €9.99 software download to a French consumer must charge French VAT at 20%, not Lithuanian VAT at 21%. OSS registration allows this to be reported and paid through a single Lithuanian return rather than separate French VAT registration.

Customs duties on goods imported from China vary by commodity code (HS code) and product type. Common e-commerce categories include: clothing and footwear (12%), consumer electronics (0–3.7%), toys (4.7%), furniture (5.6%), and sporting goods (2.7–17%). Some categories are subject to anti-dumping duties on top of the standard rate — solar panels and certain steel products, for example, carry significant additional duties. We advise on the applicable duty rate for specific products and on the correct HS code classification before the first import. Misclassification discovered during a customs audit results in backdated duty assessments plus penalties.

PCI-DSS (Payment Card Industry Data Security Standard) applies to any organisation that stores, processes, or transmits cardholder data — which includes virtually every e-commerce business that accepts card payments. The level of compliance required depends on the volume of card transactions and how cards are processed. Most e-commerce merchants that use a hosted payment page (where the card form is provided by the PSP, not the merchant) are eligible for the simplified SAQ A self-assessment, which requires relatively minimal technical security measures. Merchants with more direct involvement in card data processing face more extensive requirements. We assess the applicable PCI-DSS level and advise on compliance steps.

EU consumers have a statutory right to withdraw from any distance contract (including all online purchases) within 14 days of receiving the goods, without giving any reason. The seller must provide a full refund — including original delivery costs — within 14 days of receiving the returned goods. The right of withdrawal does not apply to: goods made to the consumer’s specification (customised products), perishable goods, sealed audio/video recordings or software once unsealed, digital content that has been downloaded with the consumer’s express consent and acknowledgement that the withdrawal right is lost on download, and accommodation or transport bookings for specific dates. We draft returns policies that correctly apply these exceptions while fully complying with the statutory framework.

Yes. A Lithuanian UAB can be operated by foreign shareholders and directors with no physical presence in Lithuania — a registered address (which we provide) satisfies the legal requirement. The company can sell to EU consumers digitally or by shipping from a non-EU warehouse using IOSS. For goods stored and shipped from an EU warehouse, the company needs a fiscal representative or a Lithuanian VAT registration, which we manage. The Lithuanian entity gives the operation a genuine EU legal basis — with all the VAT, customs, and consumer protection implications that entails — without requiring the founders to be physically located in Lithuania.

Ready to set up your Lithuanian e-commerce company?

Contact us to discuss your business model, product categories, and target markets. We will confirm the correct VAT registration strategy, advise on any customs implications, and provide a full service scope covering accounting, legal, and compliance from day one.