Lithuania/ 5.1 General legislation  

5.1.5 Tax laws

The Law on Charity and Support (2000, amended in 2004) addresses charities and their support to the development of programmes in science, culture and education, as well as programmes for the protection and restoration of cultural monuments. It has legalised the establishment of non-profit funding organisations. However, according to this law, VAT exemptions are applied only to government (state, municipalities) institutions.

The Law on Population Income Tax (2002) set a 15% royalty tax and gave the residents of Lithuanian the right to transfer up to 2% of income-tax to legal recipients of support.

VAT on goods and services is 18%. According to the Law on Value Added Tax (2002) a reduced rate of VAT 5% tax is applied to books, newspapers, magazines production, attendance at culture performances, services provided by artists, etc. VAT is not payed by culture services provided they are non-profit legal organisations.

The Law on Public Institutions (1996) provides a possibility for private cultural institutions to receive the legal status of non-profit organisations. Currently, NGOs operate in a variety of cultural, arts, artistic education, and cultural heritage fields.