Lithuanian Tax Authority Updates VAT Rules on Business Gifts and Depreciated Assets

On 11 August 2026, the State Tax Inspectorate (VMI) published an updated version of its methodological guidance KM1704, "VAT Treatment of Business-Related Gifts and Product Samples". The update introduces two important clarifications concerning corporate gifts and the transfer of company assets to staff.

First, regarding gifts presented to business partners, the tax authority clarified that items are no longer strictly required to display company branding or directly relate to the company's principal business activities to be treated under standard business gift VAT rules.

Second, section 11 of the publication clarifies the procedure when assets previously used in economic activities (such as laptops, mobile phones, or office furniture) and for which input VAT was originally deducted are transferred to employees free of charge. Under Article 5 of the Lithuanian Law on VAT, such a transfer is deemed a supply of goods for private needs, obligating the taxable entity to issue a VAT invoice.

Pursuant to Article 15(3) of the Law on VAT, the taxable base corresponds to the market value of the goods at the time of supply. If the transferred asset is fully depreciated and its actual market value at that moment is zero, the VAT taxable base is EUR 0, resulting in zero output VAT payable.

The guidance does not outline specific evidentiary standards—such as internal defect reports, write-off acts, or independent appraisal reports—that tax inspectors consider sufficient proof of a zero market value. Additionally, the publication addresses exclusively VAT rules and does not interpret Personal Income Tax (PIT) implications regarding benefits in kind under Article 9 of the GPM Law if the asset retains residual utility.