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LithuaniaVMI

VMI gift guidance updates VAT deductions and adds a used-asset example

The revised leaflet uses a 50% input-VAT limit for qualifying representation costs and explains the taxable value of used assets given away after input VAT was deducted.

By Taxxa AI OyPublished 11 August 2026

Tax

Industry: Across industries

Lithuania’s State Tax Inspectorate (VMI) has revised its guidance on business gifts and samples to show a maximum 50% input-VAT deduction for qualifying representation expenditure. The previous leaflet used 75%. The new version presents the rules applicable on 1 January 2026.VMI

The deduction applies where the expenditure qualifies as representation costs under the corporate income-tax rules and relates to the VAT payer’s taxable activity. VMI applies the same limit to hospitality, including purchases of sweets, coffee or tea for that purpose. Its revised example allows EUR 105 of input VAT to be deducted from a EUR 210 VAT charge on hospitality for business partners.

The leaflet distinguishes hospitality from gifts that the recipient can use as goods. It also distinguishes both from advertising material such as catalogues and leaflets: distributing those materials to promote taxable activity is not treated as giving customers goods for their own use. The input-VAT restrictions specific to representation therefore do not apply to that advertising material, subject to restrictions connected with mixed taxable and exempt activity.

A new example addresses computers, furniture and other assets previously used in the business. Where input VAT was deducted and the asset is transferred free of charge, for example to an employee, VMI treats the transaction as a supply for private use.VMI A VAT invoice is required. The taxable value reflects the remaining part of the acquisition value, taking account of use in the business at the time of transfer. VMI gives a zero taxable value where the asset is fully depreciated and its real value at transfer is zero.

The revised reduced-rate example for gifted books uses 5% VAT. The leaflet explains that a reduced rate applicable to the goods also applies when VAT is calculated on their use as gifts.

The legal basis is the Pridėtinės vertės mokesčio įstatymas and the gift and sample rules approved by Government Resolution No. 861.

Check representation input-VAT deductions and the taxable value of used assets given away.

Sources

Paaiškinimas dėl su verslu susijusių dovanų ir prekių pavyzdžių apmokestinimo PVM (2026 m. sausio 1 d.)