Lithuania: the VAT law

Alessandro PasutThe VAT Law was supplemented with new explanations and practical examples regarding the sale or other transfer of immovable property. The sale of an old building together with the land is considered as a supply of building land, which is a VAT taxable transaction, if the seller has demolished the building or is committed to demolish it. The demolition of the building has to be started before the conclusion of the transaction. The above described transaction or sale of an old building, which is being reconstructed into a new building, together with the land is considered as a supply of an old building which is being sold together with the land – this transaction is exempt from VAT -, if only partial demolition of the building is done and the building is still being used as a building. The main criteria for the determination of the land as being building land are: a detailed plan must be approved; a decision to change the purpose of the land is issued; a territorial planning document similar to the detailed plan, where the conditions for construction are determined, is approved; records of data on the purpose of the land exist at the Register of Immovable Property.

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