Lithuania: VAT in the Digital Age (ViDA) and E-Invoicing Requirement

ViDA consists of three main pillars: Digital Reporting Requirements (“DRR”) and electronic invoicing (“e-invoicing”); new VAT rules for the platform economy; and measures aimed at achieving a Single VAT Registration (“SVR”) across the European Union (“EU”).

Under the DRR pillar, structured e-invoicing and transaction-based digital reporting will become mandatory for relevant cross-border B2B transactions from July 1, 2030. E-invoicing will become the mandatory and default invoicing method for transactions covered by the new reporting requirements, significantly transforming VAT compliance requirements for businesses operating within the EU.

 Legal framework for e-invoicing in Lithuania

In Lithuania, VAT invoices may already be issued electronically, provided that the customer has agreed to receive electronic invoices and that the authenticity of origin, integrity of content and readability of the invoice are ensured throughout the applicable retention period.

An electronic VAT invoice is not limited to any particular file format. It may be issued and received, for example, by email in PDF or Word format, as a structured XML or other electronic message, through an online portal or by using another electronic method agreed between the parties. The customer’s prior consent may be expressed in any form, including in writing, orally or through the parties’ established business practices.

 Lithuania also operates the General Information System for the Administration of Invoices (“SABIS”), which began operating in 2024 and replaced the former “E. sąskaita” system. Under the applicable Lithuanian public procurement and financial accounting rules, public-sector entities and other contracting authorities, as well as suppliers providing goods, services or works to them, are required to submit and receive electronic financial accounting documents through SABIS. The precise application of this requirement should be assessed by reference to the legal status of the purchaser and the nature of the relevant transaction. The SABIS requirement is a separate Lithuanian national requirement and was not introduced by ViDA.

For general domestic business-to-business (“B2B”) and business-to-consumer (“B2C”) transactions outside the scope of specific national requirements, electronic invoicing currently remains voluntary. Where a VAT invoice is issued electronically, the parties may use different electronic formats, provided that the applicable Lithuanian VAT invoicing requirements are satisfied. Lithuania has not introduced a general mandatory domestic B2B or B2C e-invoicing regime.

Not every electronic invoice is necessarily a structured electronic invoice. For example, an invoice issued in PDF or Word format may qualify as an electronic VAT invoice under the current Lithuanian VAT rules but will generally not constitute a structured electronic invoice if its data cannot be processed automatically. A structured electronic invoice contains invoice data in a machine-readable format that enables automatic and electronic processing. An XML invoice may therefore constitute a structured electronic invoice, provided that its structure and content comply with the applicable technical and legal standards.

Under ViDA, electronic invoices relating to transactions covered by the new DRR framework will have to comply with the European standard for electronic invoicing and the applicable list of permitted syntaxes. Other invoice formats may continue to be permitted for transactions that are not subject to the DRR obligations, depending on the rules adopted by the relevant Member State.

Expected developments under ViDA and how e-invoicing works in practice in Lithuania

Since the ViDA package entered into force on April 14, 2025, EU Member States have been permitted, subject to the applicable conditions, to introduce mandatory domestic e-invoicing. Lithuania may therefore introduce mandatory structured e-invoicing for domestic transactions before the EU-wide cross-border requirements become applicable. At present, however, Lithuania has not introduced a general mandatory domestic B2B or B2C e-invoicing regime.

From July 1, 2030, Lithuania will be required to apply the ViDA rules to relevant cross-border B2B transactions. For transactions covered by the DRR framework, structured e-invoicing will become mandatory and the default invoicing method. The DRR framework will replace the existing recapitulative statement, or EC Sales List, reporting system for relevant intra-EU transactions with transaction-based digital reporting based on data extracted from structured electronic invoices.

Under the current ViDA implementation framework, the reported information will be exchanged between Member States through the electronic central VAT information exchange system (“central VIES”). Central VIES is scheduled to become operational when the principal DRR provisions start applying on July 1, 2030. Its technical architecture, data requirements and interfaces with national systems are being developed and tested as part of the ViDA implementation process.

Member States may also introduce domestic digital reporting requirements. However, domestic digital reporting systems introduced after January 1, 2024, will have to be aligned with the EU framework applicable to intra-EU transactions from July 1, 2030. Member States that introduced qualifying domestic real-time digital reporting systems before January 1, 2024, may have until January 1, 2035, to align those systems with the common EU framework.

Lithuania already operates invoice-level reporting through the i.SAF subsystem of the Smart Tax Administration System (“i.MAS”). Under the current system, issued and received VAT invoice-register data are submitted periodically. Accordingly, i.SAF is not currently equivalent to the structured e-invoicing and transaction-based cross-border digital reporting framework that will be introduced under ViDA.

Further Lithuanian legislative and technical developments are therefore expected as Lithuania prepares to align its national systems with the ViDA framework and the central VIES infrastructure.

Experience and challenges in implementing e-invoicing

Although Lithuania has not introduced a general mandatory domestic B2B structured e-invoicing regime, many Lithuanian businesses are voluntarily digitalising their invoicing processes to improve operational efficiency and prepare for future regulatory changes.

Our experience supporting organisations with digital tax compliance projects demonstrates that implementing structured e-invoicing solutions may require significant investment in ERP systems, accounting software, data management and internal control processes.

The main implementation challenges include:

• integration of structured e-invoicing solutions with existing ERP and accounting systems;
• ensuring compatibility with the European electronic invoicing standard and the permitted syntax formats;
• ensuring compliance with evolving technical standards and legal requirements;
• adapting internal business processes, approval procedures and document workflows;
• maintaining accurate and consistent customer, supplier and VAT master data;
• ensuring that different electronic invoice formats can be properly received, validated, processed and retained; and
• preparing systems to support future transaction-based digital reporting obligations under ViDA.

The development of the necessary national and central IT infrastructure, as well as the interoperability of national systems with central VIES, represents one of the principal implementation challenges for Member States. Early preparation may allow businesses to reduce future implementation costs while improving automation, data quality and VAT compliance.

Key considerations for businesses

Where an obligation to issue a VAT invoice arises, businesses established in Lithuania must ensure that the invoice complies with the Lithuanian Law on VAT. VAT invoices must generally be retained for 10 years from their date of issue. Throughout the retention period, businesses must ensure the authenticity of origin, integrity of content and readability of the invoices.

Businesses entering into transactions with public-sector entities or other contracting authorities should separately assess whether the relevant invoices fall within the national requirements governing the use of SABIS. Businesses should also monitor Lithuanian legislative developments, as domestic structured B2B e-invoicing or additional digital reporting requirements may be introduced before July 1, 2030.

VAT reporting obligations in Lithuania

Lithuanian VAT-registered businesses are required to submit periodic VAT returns and other applicable VAT reports electronically to the State Tax Inspectorate (“STI”). VAT returns and EC Sales Lists are submitted through the Electronic Declaration System (“EDS”), while VAT invoice-register and waybill data are submitted through the relevant i.MAS subsystems.

Depending on the nature of the business and its transactions, the following reporting obligations may apply:

• VAT return (Form FR0600), submitted electronically through EDS. Where the VAT period is a calendar month, the return must generally be submitted by the 25th day of the following month;
• EC Sales List (Form FR0564) for relevant intra-EU supplies of goods and services, generally submitted through EDS by the 25th day of the following month for the months in which reportable transactions are carried out;
• Intrastat declarations, where the applicable reporting thresholds and other conditions are met;
• i.SAF submissions of issued and received VAT invoice-register data through i.MAS. Lithuanian VAT-registered legal entities whose VAT period is a calendar month generally submit the relevant data by the 20th day of the following month; and
• i.VAZ reporting of waybill and other transport-document data for qualifying movements of goods by road. Where the reporting obligation applies, the relevant data must generally be submitted no later than the date and time of dispatch indicated in the transport document.

The current Lithuanian reporting framework is expected to evolve following the implementation of ViDA. In particular, the existing EC Sales List reporting system for relevant intra-EU transactions will be replaced by the new Digital Reporting Requirements.

Lithuania’s national systems will also have to interact with central VIES and comply with the common EU technical and data-reporting framework from July 1, 2030.