Lithuania to Increase Reduced VAT Rate to 12% in 2026 | VAT Law Amendments Update

The Lithuanian Parliament is reviewing the proposed amendments to the national VAT Law, which include changes to the applicable VAT rates for the tourism, transportation, cultural services, and publishing sectors. 

These changes refer to an increase in the reduced VAT rate and changes to the applicable VAT rate for printed and electronic books. Notably, the standard VAT rate of 21% remains unchanged.

Impact of Amendments

As stated in the proposed amendments to Article 19 of the Lithuanian VAT Law, the reduced or preferential VAT rate will increase from 9% to 12% starting January 1, 2026. The 12% reduced VAT rate will apply to accommodation services, passenger transport services operating on regular routes, including passenger luggage transport, and admission to art and cultural institutions and events.

In addition, the amendments also introduce a change in the applicable rate on printed and electronic books and printed and electronic non-periodical information publications, such as textbooks, exercise books, encyclopedias, dictionaries, reference books, information brochures, photo and reproduction albums, children's picture books, drawing and coloring books, printed or handwritten sheet music, maps, and similar printed materials.

Therefore, supplies of these publications will be subject to a 5% reduced VAT rate, instead of the current 9%. However, this does not apply to publications where advertising makes up more than 80% of the total publication. Additionally, if the publications consist entirely or predominantly of music or video content, they are excluded from the scope of this provision.

Conclusion

The Lithuanian Parliament has yet to vote on the proposed amendments, and the final decision is expected to be made before July 1, 2025. Nevertheless, taxable persons should consider these amendments and prepare to change their invoicing, accounting, reporting systems, and software.

Moreover, taxable persons should monitor further developments to determine the final decision on the proposed amendments and whether they are coming into force.

Source: The Lithuanian Parliament - Law Amending Article 19