Starting 1 July 2018, Vilnius is introducing a city tax. The tax rate is EUR 1 person/night.
The tax applies to all guests using accommodation services.
The purpose of the decision effective as of 1 July 2018 is to boost the competitiveness of Vilnius, develop international marketing in the area of tourism, attract larger flows of tourists to the city of Vilnius, and increase the volumes of export services. The objectives pursued are expected to contribute to the improvement of quality of life in Vilnius city. The tax will be charged upon the guests of the city who are provided accommodation services and who use the public tourism and recreation infrastructure of the Vilnius city.
No city tax is charged upon:
*The exemption is valid until 1 January 2019.
The city tax shall be paid regularly on a monthly basis to an account specified by the Administration of the City of Vilnius, by completing a data return. The tax return may be filed and the tax transferred online only.
Please be advised that the city tax is not included in the room fee. The company providing accommodation services shall include the city tax in the invoice.
Will the city tax be also charged upon citizens of Lithuania?
Yes, the tax will be charged upon all natural persons staying in accommodation entities operating in the territory of the City of Vilnius.
Is the tax charged by hotels and other entities providing accommodation services?
The tax is charged by the City of Vilnius, rather than companies or persons providing accommodation services.
Will the tax be charged all year round?
Yes, the tax will be charged all year round.
Is the tax subject to VAT?
No, the tax is not subject to VAT.
Will the entities / natural persons providing accommodation services be obliged to pay corporate income tax on the collected tax amount?
No, corporate income tax shall not be charged upon the amounts of the city tax. Based on the provisions of Section III of 10 Business Accounting Standards, the Law on Income Tax treats only the increase in the economic benefit of an entity as income. Any amounts collected on behalf of third parties are not recognised as income, because they do not increase the economic benefit of an entity or increase its equity. The income of the intermediaries is the commission fee only, rather than any amounts collected on behalf of third parties.
How will the tax collected?
Each accommodation service provider shall, within the framework of its corporate accounting system, introduce the tax as a new service, i.e., when issuing an invoice, the tax shall be presented in a separate line, as well as in the cash register receipt; in case the payment is recorded by issuing a cash receipt, the tax shall be included in the gross amount, though the service will be singled out in a separate line.
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