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Rolandas Puncevičius, Senior Advisor to the Control Department of the State Tax Inspection (STI), stated that the tax administrator plans to expand the arsenal of control measures through a multifunctional infraction control system that records the movement of vehicles in the main and regional highways and a number recognition system for vehicles crossing the state border, at border crossings, video capture and identification of car license plate numbers.
These measures will make it possible to identify cases where company-financed cars are used for private purposes, such as going to the beach, on the road or on vacation abroad after weekends or outside working hours. It is also planned to cooperate with tourist municipalities to obtain additional information on the movement of company-owned vehicles, which may not be related to labor objectives.
In addition, R. Puncevičius revealed that in the near future it is planned to expand the cooperation with the municipality of Neringa by providing information on the entry of company-owned cars in this municipality, and in the future it is planned to seek various solutions with other complexes. municipalities.
“During the tax inspection or control actions, travel documents, refueling time, vehicle mileage and other related information are verified. This information can also be requested by contacting commercial representatives for monitoring.
If there is a suspicion that the car can be used for personal purposes, it is also planned to verify the movement of the vehicle on the basis of the data collected by the systems mentioned above. It should be noted that the STI has the right to inspect the taxpayer for the current and the previous three calendar years “, – the news portal lrytas.lt R. Puncevičius said.
At the time of inspection, the taxpayer must prove that the car is being used for the needs of the company.
In addition, additional documents can be requested: the purpose of the car purchase, the means used to purchase the car (own or loaned), the company’s accounting (fixed assets or property), the use of the car (operational or rented) , the cost of using, storing and operating the car, fuel rate accounting procedure, who uses the car in the company (what functions do these employees perform), average mileage per month, if the car is rented, please provide the customer search, price and configuration information, other relevant information: VAT deduction, costs, type of income.
If the car is purchased in the name of the company, it must be used in the activities of the company for its intended purpose, that is, to earn income and receive financial benefits. Such a car can also be used for personal purposes, such as shopping for work or relaxing by the sea, but in this case, the profits are taxed accordingly. The benefits received by the employee are considered salaries: GPM, Sodra contributions, PSD are calculated.
“The profit obtained can be measured at the fair market price of the lease of said property or estimated at 0.75%. the real market price of that car or 0.70 percent, if the provider of income in kind does not pay the cost of the fuel used, and is taxed in accordance with the procedure established by the GPM.
It is also important that if the cars and / or SUVs are purchased for commercial purposes (not for sale, not used for rent or for the provision of passenger transport services in exchange for remuneration), the VAT of their purchase does not can be deduced “, – the news portal lrytas.lt stated R. Puncevičius.
According to the interlocutor, when the goods are acquired for commercial purposes but temporarily transferred to another person for free use or transferred free of charge to another person as the owner, the person transferring the goods is obliged to calculate and pay VAT on sales to budget. If VAT on the purchase of goods is included in the VAT deduction, but the goods are used for private purposes, VAT on sales must be calculated.
The Senior Advisor of the CTI Control Department indicated that during the control activities, if it is established that the personal needs of the managers, owners and employees are taken care of by the company (including the purchase costs of purchases for personal and VAT on VAT) amount of taxes and interest on arrears, administrative responsibility, fine.
Currently, the tax administrator has selected about 550 taxpayers who have bought more than 50 thousand. valuable cars.
The interviewee said that some of them were sent questionnaires in order to collect information that would allow evaluating how or to what extent they are used in the economic activity of the company or compliance with legal requirements, some companies were invited to interview the administrator tax. Likewise, so far 65 control / monitoring actions have been implemented, during which taxpayers have already declared almost 30 thousand. taxes in euros.
2020 Third quarter – 2021 I fourth after 16 control actions related to the purchase of luxury cars and more than 90 thousand. taxes in euros.
You must verify compliance
Deputy Finance Minister Rūta Bilkšytė spoke on “Žinių radijo’s” Diene Adjustment “show that cars purchased on behalf of the company can also be used for personal needs. Just for that you need to pay taxes. STI representatives indicated that compliance with the tax rate is not observed.
“We first have to look at the regulations. They make it clear that a certain proportion and percentage of the value of the car is taxed and recognized as private use. This is a fairly simple calculation,” said R. Bilkšytė.
According to the interviewee, the STI will now ask companies to declare that their cars are used for personal needs. If the car is declared and taxes are paid, no one will stop the company representative and ask questions.
“We don’t have enough tax inspectors to inspect 100,000. Cars. New technologies will help compare information about which companies have registered cars, which ones are registered for individuals, and how much taxes have been paid. You don’t need 50 grandparents here …” said the Vice Minister of Finance in the program “Žinių radijo”.
R.Bilšytė believes that there will be companies that can start to evade, but there is a common attitude and the laws must be respected by all.
Daiva Čibirienė, president of the Association of Accountants and Auditors, told the news radio program that after the implementation of this measure, a decision will be made to clarify the procedure for recognizing income in kind.
The Deputy Minister of Finance agrees with D. Čibrienė and said that the procedure should be clarified from next year.
R.Bilšytė explained that now the main administration will calculate the revenue.
“I come to the Ministry of Finance by bicycle, so I don’t use the Ministry’s vehicle. Of course, if I need to go further, it takes me away, ”said the Deputy Minister of Finance.
According to the interlocutor, the STI does not photograph cars. The system only scans car numbers, which has been done for a long time, for example, monitoring drivers for speeding. Subsequently, the STI will compare the information received with the information available and will monitor whether those cars are declared.
D.Čibirienė declared in the program “Žinių radijo” that the taxes on private needs are small, so it would be possible, for example, 25 thousand. valuing a car only for the driving function, and more expensive, for representation. According to the interlocutor, the deduction of VAT and the correction of legal loopholes should be considered.
R.Bilšytė also agrees that the rules must be observed and, if necessary, must be adjusted.
The president of the Confederation of Employers, Dan Arlauskas, commented on the program that he was scared and disgusted when he first heard the initiative, but now he was pleasantly surprised by the speeches of the STI.
“The most important thing is the transfer of data to third parties for commercial purposes. If the state can transfer data from one institution to another when it is related to the interests of the state, I don’t see any threat ”, commented D. Arlauskas.
According to the interlocutor, now it is necessary to prevent entrepreneurs who begin to cheat and agree on common “rules of the game”, which should be the same.
“It would be good for the Ministry of Finance to consult with those to whom something is being done, in relation to whom it will be done,” said the president of the employers’ confederation.
I could start to follow everyone
Andrius Romanovskis, president of the Lithuanian Business Confederation, said mockingly that the STI could start following everyone and explain everything: “I could start the public monitoring. Where is he going and what is he doing? “
According to the interlocutor, this act is incomprehensible to entrepreneurs and many people.
“The problems must be solved in a civilized manner. It seems to me that this decision was made because it was difficult for them to distinguish administratively when the car is used for business purposes and when for personal purposes,” the news portal. lrytas.lt A. Romanovkis said.
The president of the Lithuanian Business Confederation also mentioned that unknown and large numbers are emerging from somewhere, which for him “smells politicized.” The interlocutor believes that this statement from the state is political pressure on the tax office.
“It just came to our attention then. Many companies are surprised by this decision, but perhaps there is so much political fad here now …”, commented A. Romanovkis.
There are large sums in the budget.
A senior advisor to the STI Control Department provided a number of examples of companies attempting to make illegal use of the VAT deduction for luxury cars, in all of which the returns were adjusted for an additional VAT: Porsche was acquired for EUR 92,396.70 and VAT for € 19,403.3; Mercedes was bought for 74,800 and the amount of VAT is 12,981.82 euros. Another Mercedes car was bought for 71,199 and the amount of VAT is 12,356.85 euros.
R.Puncevičius for the news portal lrytas.lt He explained that the satisfaction of personal needs at the expense of the companies supposes an unjustified increase in the deductions allowed by the companies and the deduction of VAT, including the cost of purchasing personal purchases and the input VAT, thus reducing taxable corporate profits and VAT to pay. Personal benefits are also obtained by avoiding payable GPM.
Business funds meet the diverse personal needs of business leaders, owners, and employees, but focus on acquiring a variety of vehicles, including pleasure boats and airplanes; the acquisition of real estate and travel that is treated as a business trip.
During 2019. During 48 control actions, the STI identified cases of satisfaction of personal needs with company funds and receipt of income in kind. In the course of these control actions, the total amount of taxes / related taxes and related amounts entered into the budget amounted to almost 2.2 million. euros.
During 2020, the STI identified 72 cases of satisfaction of personal needs with company funds and receipt of income in kind during 72 control actions. During these control actions, the total amount of taxes / related taxes to be paid / declared to the budget was approximately 1.5 million. euros.
During 2021. I fourth The STI identified 31 control actions to satisfy personal needs with company funds and receive income in kind. During these control actions, the total amount of taxes payable / reportable and related to them entered in the budget amounted to almost 254 thousand. euros.
