In order to help microenterprises cope with the COVID-19 crisis, the government of the Republic of Lithuania passed a decision No. 474 on implementation of a certain measure, aimed to reduce the negative consequences of the aforementioned crisis. The measure is a state subsidy provided for businesses in order to maintain their liquidity.
The plan is to provide 100-million-euro worth of subsidies until the end of 2020. The subsidies will be distributed based on applications submitted by legal persons fulfilling the definition of a microenterprise. The measure is being implemented in close cooperation between the State Tax Inspectorate (hereinafter – the STI), the Ministry of Economy and Innovation and the Lithuanian Business Support Agency.
Applications for the state subsidy can be submitted by a legal person which:
- is a microenterprise and employs between 1 to 9 employees at the start of the month in which the list is created
- is an enterprise which was affected by COVID-19 crisis and is included in the STI created list of taxpayers which were affected by COVID-19 crisis (legal persons which were included in the aforementioned list without submitting an application and legal persons which are included in the list after evaluating their application request)
- has paid personal income tax to state and municipalities budgets in 2019 (irrespective of income type on which personal income tax has been paid)
- its legal status is not one of the following on a day the list is created: in the process of bankruptcy; bankrupt; undergoing restructuration; participating in reorganization; undergoing rearrangement; undergoing de-merger; undergoing liquidation
The Lithuanian Business Support Agency evaluates enterprises selected based on the above criteria and sets the maximum amount of aid that can be provided in accordance with regulations of European Commission.
An invitation to apply for a subsidy is issued through an authorized “My STI” website to an enterprise which was selected and evaluated in accordance with aforementioned procedures. The application can be filled and submitted at the same place – My STI website. After receiving the application of an enterprise and information on the eligible amount of aid, the STI passes that information on a daily basis to the Ministry of Economy and Innovation which then makes the decision on granting the subsidy and organizes transfer of funds.
Taking into account the criteria set by the Government of the Republic of Lithuania, the STI accounted for a list of 34 000 micro-enterprises that will be personally invited to apply for grant of particular amount (amount varies depending on the sum of personal income tax, paid by a company in 2019). The process has already started. The call for applications for a grant will be received (in the authorised “My STI” system) by companies that: on May 1, 2020, had at least 1 and at most 9 employees; are included in the lists of COVID-19 affected companies compiled by the STI; in 2019 paid personal income tax to municipal and state budgets; and are not bankrupt, restructured or liquidated.
The Lithuanian Business Support Agency, in turn, also evaluates the micro-enterprises selected by the STI and sets the maximum allowable aid amounts set by the European Commission regulation. According to this regulation, the total amount of aid granted to one company (including other measures) must not exceed EUR 200 000 over the last three tax years. For an undertaking engaged in the carriage of goods by road for hire or reward, the amount shall not exceed EUR 100 000; for one enterprise of the agricultural sector – EUR 20 000; for one company in the fisheries and aquaculture sector – EUR 30 000.
The STI applies emergency measures for taxpayers affected by the COVID-19 whose economical activities have been banned by Government. The emergency measures are also applicable to taxpayers who have faced a negative impact of COVID-19 and have submitted a request. When a taxpayer's request is received, the average tax paid by taxpayers is assessed. Taxpayers whose requests were received after 1st of May are assessed on the basis of the risk scores. It is estimated that the higher risk score shows lower level of taxpayers’ negative impact from the COVID-19. Taxpayers with significant revenues or with high-risk score are requested to provide additional documents to prove the negative impact from COVID-19. Taxpayers who are confirmed as affected by the COVID-19 are included into the group “Legal entities which are applied tax-exempt measures because of COVID-19, on their request “. The Legal entities included into this group are subject to suspension of recovery, they are not charged interest and payment of taxes for they will be postponed with zero interest if they are unable to pay within two months from the country's emergency. All taxpayers included in the mentioned group are revised and if reassessment shows that the taxpayer has not been affected by COVID-19, the taxpayer is excluded from the group and cannot be a subject for emergency measures.
Changes in VAT:
- The temporary relief from import duties and VAT on importation of goods to combat Covid-19 as foreseen in the Commission Decision (EU) 2020/491; abolishment of monetary limitations on goods given as donations where input VAT was deducted (i.e. no need to calculate VAT on private usage); attribution of certain goods to medical goods in order to benefit from the reduced rate for medical supplies;
- VAT payers who have lost perishable goods / part of them due to the announcement of quarantine do not need to adjust the VAT deduction for the lost goods as it is considered lost due to other force majeure circumstances.
Changes in excise duty:
- extension of possibility to use certain partially denatured alcohol for the production of disinfectants (without the need to pay excise duties).
COVID-19. Information for residents engaged in individual activities:
Information for businesses regarding COVID-19:
In case you have any document of information which you find worth to share regarding the actions, measures or concrete experiences in countering the crisis, please do not hesitate to upload it to the subpage focusing on Covid-19 Crisis Support on IOTA website in order to share it with other members.