Background information

On 22 June 2021, the Seimas of the Republic of Lithuania adopted Law No XIV-429 Amending Article 19 of Law No IX-751 on Value Added Tax of the Republic of Lithuania, introducing a provisional reduced VAT rate of 9% for the catering and cultural sectors to be effective until 31 December 2022. According to the initiators of the amendments to the VAT law, the main purpose of this measure is to help the catering and cultural sectors that have been hit hard by COVID-19 and have been unable to provide services for a long time due to lockdown-related restrictions.

Content of measure

The amendments to the law stipulate that the reduced VAT rate of 9% will be applied to:

• catering services provided by restaurants, cafes and similar catering establishments and take-away food, with the exception of alcoholic beverages and services or part thereof related to alcoholic beverages;
• attendance at all types of art and cultural institutions, arts and cultural events, sports events, sports clubs and at services similar to those of sports clubs provided by other persons;
• performance services provided by performers (actors, singers, musicians, conductors, dancers or other persons who play, sing, read, recite or otherwise perform literary, artistic, folklore or circus acts).

These amendments to the law came into force on 1 July 2021 to be effective until 31 December 2022. The standard VAT rate in Lithuania is 21%.

Use of measure

According to the Lithuanian Association of Hotels and Restaurants (LAHR), about 2,600 companies in the catering sector, employing about 30,000 people, will be able to benefit from the VAT relief in Lithuania. No information is available for the cultural sector.

Target groups

Workers	Businesses	Citizens
Does not apply to workers	Sector specific set of companies	Does not apply to citizens

Actors and funding

Actors	Funding
National government Company / Companies Public support service providers	No special funding required

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	Informed	Informed
Form	Not applicable	Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

• No involvement
• Main level of involvement: Sectoral or branch level

Involvement

No information available.

Views and reactions

The LAHR President welcomed the measure. According to her, restaurants will be able to use the additional funds to cover debts and raise salaries for staff. Representatives of trade unions and employers in the cultural sector have not expressed their views in that regard.

Sectors and occupations

This case is not occupation-specific.

Sources

• 22 June 2021: Law No XIV-429 Amending Article 19 of Law No IX-751 on Value Added Tax of the Republic of Lithuania (e-seimas.lrs.lt)
• 22 June 2021: The 9% reduced VAT rate for catering services and culture (www.vz.lt)
• 22 June 2021: After many years’ wait, Seimas temporarily reduces VAT rate to 9% for restaurants, events, cinemas and sports clubs (www.lrt.lt)
• 22 November 2022: Law amending Article 19 of the Law on Value Added Tax of the Republic of Lithuania No IX-75 (e-seimas.lrs.lt)