Page 37 - Central and Eastern European Transfer Pricing Review

Lithuania | 37

Lithuania

KPMG's Views on Transfer Pricing in Lithuania

Transfer pricing rules were implemented in Lithuania in 2004. In general, they
are a condensed form of the OECD Guidelines.

Over the past few years, transfer pricing has been subject to increased focus. The
tax authorities are now requesting that companies submit transfer pricing
documentation for review.
The Lithuanian tax authorities have direct access to the Amadeus database allowing
them to analyze benchmarking studies and perform adjustments. They are also
increasing investigations of transactions involving management services, centralized
purchasing services, loans and license agreements.

Basic information Transfer pricing materials, goods, production items,

Tax authority name disclosure overview provision/acquisition of fnancial
services, provision/acquisition of
Valstybine mokesciu inspekcija Are disclosures related to transfer other services, sale/purchase of
(State Tax Authority). pricing required to be prepared or shares and/or derivatives, lease of
submitted to the revenue authority real estate and other property, as
Citation for transfer pricing rules on an annual basis (e.g. with the well as any other transactions).
Order No. 1K-123 of the Minister of tax return)? The statement must specify income
Finance (9 April 2004). Disclosures related to transfer pricing received/expenses incurred for each
(form FR0528 transactions with related type of transaction.
Effective date of transfer pricing parties) must be submitted to the tax
rules authorities with the tax return. Transfer A transfer pricing study must be prepared
2004. pricing documentation must be prepared every year (if the criteria are met) but
but not submitted. submitted to tax authorities only upon
What is the relationship threshold request.
for transfer pricing rules to apply What types of transfer pricing
between parties? information must be disclosed? What are the consequences
Ownership higher than 25 percent, based Annual statement (form FR0528) should of failure to prepare or submit
on voting power, or under common include the following information: disclosures?
control, or in cases where the parties can Administrative penalties for non-
otherwise infuence each other. associated parties submission may be imposed. In practice,
number of transactions one does not observe penalties being
What is the statute of limitations imposed.
on assessment of transfer pricing type of transactions performed with
adjustments? each associated party (sale/purchase
Generally the current year and of tangible fxed assets, sale/purchase
5 previous taxable years. of intangibles, sale/purchase of raw

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