VAT registration in 2026: when it is mandatory, when it is worth registering voluntarily and which mistakes cost the most

“Do I already need to register for VAT?” is one of the questions we hear most often from small businesses. Since 1 May 2025 the threshold is calculated differently, so it is worth checking whether your calculation follows the new rules.

When registration is mandatory

In Lithuania, VAT registration is mandatory when the consideration for goods and services exceeds EUR 45,000. Since 1 May 2025, this threshold is assessed over the previous and current calendar years (previously – over the last 12 months). Important: VAT must be charged from the very transaction that took you over the threshold, so registration cannot be postponed.

When it is worth registering voluntarily

• your clients are mostly VAT payers – your price including VAT costs them no more, because they deduct the VAT;
• you buy a lot of goods, equipment or services with VAT – once registered, you can deduct input VAT;
• you work with EU partners for whom a VAT number matters.

When there is no need to rush

If your clients are mostly private individuals and you have few purchases with VAT, early registration may simply mean a more expensive service for clients and more administration. In that case it is important to keep an eye on your income and spot the threshold approaching in time.

What being a VAT payer means

• VAT invoices with the mandatory details;
• VAT return – by the 25th of the following month;
• i.SAF data – by the 20th of the following month;
• correctly applied VAT rates and classifiers. Reduced rates changed in 2026 – the 9% rate no longer applies, and 12% applies to accommodation, passenger transport and cultural services.

The costliest mistakes

1. The threshold is exceeded, but registration is late. You have to pay the VAT out of your own pocket because invoices without VAT have already been issued to clients.
2. The threshold is calculated incorrectly. Part of the income is left out, or the old 12-month rule is used.
3. Input VAT is deducted without proper documents. During an audit the deduction is cancelled and late-payment interest is charged.
4. Errors in i.SAF. Mismatches between your data and your partner's are a common reason for VMI enquiries.

Advice from Ana Baranova, director of Patikima buhalterė: “Don't register for VAT just because it ‘looks more solid’, but don't wait until the last day either. When your income reaches about EUR 35–40 thousand a year, it is time to work out with your accountant what is more beneficial for you and prepare for the changes to your invoices.”

We will help you decide and sort everything out

We calculate the VAT threshold under the new rules, assess the benefits of voluntary registration, register the company for VAT and handle VAT returns and i.SAF every month.

Tax advice · Contact Us · +370 635 87770

Information valid for 2026. Assess your situation with an accountant before making a decision.