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The existing VAT relief for catering establishments in Lithuania will not be extended, but businesses may be offered a tax deferral if their energy bills exceed 10 percent of their total costs, Finance Minister Gintare Skaiste says.
Restoranas Zoltners
Restoranas Zoltners
© DELFI / Modesta Meškė

"The tax relief is temporary and is set to expire at the end of the year and there are no plans to extend it," she told the public broadcaster LRT Tuesday.

The VAT rate was reduced from the standard 21 percent to 9 percent in the second half of last year to help restaurants and cafes survive the coronavirus-pandemic-related restrictions.

Ministers are also looking into whether to keep the reduced VAT rate for accommodation services. It has been in place for the past seven years and is set to expire at the end of this year, the finance minister said.

In her words, tax deferrals for businesses facing particularly high electricity and heating bills are now under discussion.

"We are calculating how much the measure would cost for the businesses that are most affected by the energy crisis, i.e. those whose energy costs account for at least 10 percent of their total costs, so those businesses that meet this definition are likely to be offered a tax deferral measure," the finance minister told LRT.

According to Creditinfo, the bankruptcies of catering companies accounted for around 14 percent of all bankruptcies in September. Many restaurants are closing either for the winter or permanently due to the extremely high energy prices, according to LRT.

BNS
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