New obligations for foreign distance sellers making B2C sales of goods in Lithuania. The new rules tackle the use of plastic and other polluting materials.
A number of EU Member States have environmental taxes to tackle the use of plastic and other polluting materials. In Lithuania, the Ministry of Environment have recently issued guidance in respect of the liability of foreign businesses selling goods online to Packaging Tax for businesses. This allows Tax Authorities to potentially enforce the collection of packaging tax from foreign businesses that exceed the threshold.
Obligations for Distance sellers
If a foreign distance seller;
- Makes B2C sales of goods to Lithuanian customers; and
- The weight of the packaging is more than 0.5 tonnes per annum
Then they have the following obligations. This is irrespective of whether they have a VAT registration in Lithuania or not:
- Register as an importer of goods in the Packaging and Waste Record Information System (GPAIS);
- Report the packaging brought to Lithuania on a quarterly basis in GPAIS; and
- Submit the Pollution Tax (form FR0524) on an annual basis by 15th February of the following year.
Should the packaging supplied to Lithuanian customers not exceed the 0.5 tonnes, but the foreign distance seller is a Lithuanian VAT payer, then the seller will still have a requirement to report a list of packaging on a quarterly basis. Therefore, compliance with packaging tax regulations is essential for all foreign distance sellers that have a VAT registration in Lithuania.
If the foreign distance seller has no obligation to register as a VAT payer in Lithuania i.e., they have not breached the threshold and the packaging is below 0.5 tonnes, they will be exempt from packaging reporting and tax obligations.