Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.
Factsheet for measure LT-2022-1/2900 – measures in Lithuania
Country | Lithuania , applies nationwide |
Time period | Temporary, 01 January 2022 – 30 April 2022 |
Context | War in Ukraine |
Type | Legislations or other statutory regulations |
Category |
Promoting the economic, labour market and social recovery into a green future
– Support for energy bills |
Author | Inga Blaziene (Lithuanian Centre for Social Sciences) and Eurofound |
Measure added | 15 September 2022 (updated 20 September 2022) |
On 17 March 2022, the Seimas of the Republic of Lithuania approved Law No. XIV-942 on Adding Article 125-2 to Law No. IX-751 on Value Added Tax and Repealing Article 125-2, whereby the reduced VAT rate of 9% for district heating is set at 0% for households in Lithuania. This is the State’s way of reducing the skyrocketing costs of home heating and hot water for households in 2022.
The amendments to the law provide that the reduced VAT rate of 9% for district heating applied to households in Lithuania is temporarily set at 0%, with the difference (from 9% to 0%) being compensated to heat suppliers from the State budget.
The new VAT rate will apply retroactively from 1 January 2022 and will only cover the winter-spring heating season until 30 April 2022.
The zero rate will only apply to heat energy supplied to households for home heating (including heat energy supplied through the hot water supply system), as well as to hot water or cold water supplied to households for home heating.
The Ministry of Finance (MF) of the Republic of Lithuania estimates that the VAT compensation for heat energy will reduce households’ bills by almost a tenth and will cost the State budget around €23 million.
The Government's proposal to apply a zero VAT rate for the heating seasons of 2022-2023 and 2023-2024 is currently being considered.
According to the Ministry of Energy (ME), about 57% of all heat consumed in Lithuania is supplied by district heating, and almost 694,000 households receive their heat in this way.
Workers | Businesses | Citizens |
---|---|---|
Does not apply to workers | Does not apply to businesses | Applies to all citizens |
Actors | Funding |
---|---|
National government
Public support service providers |
National funds
|
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 information available.
No information available.
Citation
Eurofound (2022), Zero VAT rate for district heating, measure LT-2022-1/2900 (measures in Lithuania), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/LT-2022-1_2900.html
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30 January 2023
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