Platform buyers' VAT duty now turns on permanent residence

A private individual who buys automated electronic services from foreign platforms such as Booking.com or Airbnb while letting out immovable property in another state owes Lithuanian reverse-charge sales VAT on those services only if their nuolatinė gyvenamoji vieta is LithuaniaVMI — and the test deciding that has changed. Where the income-tax definition of a nuolatinis Lietuvos gyventojas used to decide, a permanent-residence test decides nowVMI.

The old test, taken from the income-tax act, caught anyone meeting any one of five alternatives: a permanent home in Lithuania, the centre of personal, social or economic interests in Lithuania, 183 or more days in Lithuania in the tax period, 280 days over consecutive tax periods with 90 in one of them, or a Lithuanian citizen paid under an employment or equivalent contract or supported from Lithuanian state or municipal budgets — with a departure declared in the population register expressly disregarded. The new test asks instead for the state of the address entered in the population or similar register or given to the tax authority, or failing that, the state where the person usually lives because of personal and professional ties — personal ties alone where there are no professional ties or those ties bind the person to another state.VMI

The practical divide follows the new line. A person whose permanent residence is Lithuania and who registers as a VAT payer files FR0600 by the 25th of the following month: services bought from an EU VAT payer are reported in boxes 23 and 24 with the computed VAT in boxes 25 and 32, while services from an EU non-payer or from third countries go in box 23 with VAT in 25 and 32, and box 35 carries the deductible amount where the services serve taxable activity. Under the small-business scheme the same buyer files the monthly PVM101 return, with the system computing the VAT itself — EUR 1,000 of Booking.com services at 21 per cent puts EUR 210 payable, and the FR0600 illustration computes EUR 21 on EUR 100. A person whose permanent residence is not Lithuania owes no Lithuanian sales VAT on the platform servicesVMI, has no duty to register as a Lithuanian VAT payer or scheme payer, pays VAT on the commission in the state of residence, and files nothing with the Lithuanian tax administrator.

The place-of-supply reasoning around the test is unchanged: a platform's intermediation fee is not tied to where the let property sits, the platforms' services are not the representation services carved out of the general rule, and the general rule looks to where the buyer is established — so a Lithuania-established buyer performs the VAT duties in Lithuania whatever country the rented property is in. Legal basis: the PVMĮ place-of-supply rules the guidance applies, the Gyventojų pajamų mokesčio įstatymo Article 4 residency test now dropped for this purpose, and the VMI guidance on individuals buying foreign-platform services while letting property abroad.