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Margin invoicing in Lithuania: what you need to know

12.12.2023
Margin invoicing in Lithuania: what you need to know

Understanding margin invoicing in Lithuania is essential for any company seeking transparent and efficient financial management. In this article, we delve into the subtleties of margin invoicing, legal requirements and practical tips that will not only help you manage these documents correctly, but also optimise your taxes. You’ll learn about the most important aspects, from the correct completion of the document to the benefits it brings to your company’s financial management.

What is a margin invoice?

A margin invoice is a financial document that reflects the margin on a transaction, i.e. the difference between the purchase price and the selling price of goods or services. In Lithuania, this document is important for companies, especially those operating in the wholesale sector. This document helps to effectively manage finances and calculate taxes.

Legal framework in Lithuania

In Lithuania, the use of the margin invoice is strictly regulated by the State Tax Inspectorate (STI) to ensure the legality and transparency of business operations. This financial document must be drawn up in accordance with established standards and contain all the necessary details to ensure correct and efficient tax management.

In particular, the VAT (value added tax) code must be indicated on the margin VAT invoice. This is an important element to clearly identify the specifics of the tax request and ensure that the tax is charged correctly. Secondly, the date of the transaction, which indicates when the sale or supply of the service took place.

It is also important that the invoice clearly and accurately identifies the details of the parties: company name, legal address and company code of both the buyer and seller. This not only helps to ensure transparency in business transactions, but also facilitates possible audits or inspections

Furthermore, the margin invoice should specify the goods or services, their quantity, the unit price, the total value of the transaction and, of course, the amount of the margin itself. This is important not only for tax purposes, but also for the overall transparency of business transactions. This document must be kept and stored in an orderly manner so that it can be presented in case of tax returns or in response to queries from the tax authorities.

How to fill in a VAT margin invoice correctly?

The correct use and storage of the margin invoice is essential for any trader who wants to avoid misunderstandings with the tax authorities and ensure the smooth running of his business.

Correctly filling in the margin invoice is essential to avoid possible misunderstandings with the tax authorities. First of all, it is important to ensure that the invoice clearly and accurately states the margin. It should also contain all the necessary details of the parties and the details of the transaction.

Margin invoicing and tax optimisation

One of the advantages of the margin invoice is the possibility of tax optimisation. This document allows the company to clearly see the margin and calculate taxes based on it, thus helping to manage finances more efficiently.

Cooperation with accountants and financial advisors

To use margin invoices effectively, it is worth consulting experienced accountants or financial advisers. They can help you understand the legal requirements and make sure all your financial documents are correct.

Applications

Margin invoicing in Lithuania is an important tool for managing a company’s finances. The correct completion and use of this document can help a company to run its business successfully, optimise taxes and avoid legal problems. It is important to constantly liaise with financial specialists and comply with legal requirements to ensure the smooth running of your business.

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