“Let's start with the fact that after the end of the financial year or after finishing work and leaving the country, every person must submit an income tax return to the state tax inspectorates of foreign countries, and at the same time to the Lithuanian State Tax Inspectorate (STI) (Valstybinė mokesčių inspekcija). It is therefore recommended to complete the declarations and start the tax refund now that quarantine measures have already been relaxed in many countries and public authorities are starting to work at a normal pace. Failure to submit or late submission of the declaration may result in financial penalties,” warns Žydrūnas Janušauskas, director of the tax refund company RT Tax.
"After submitting a tax return to the STI and receiving a certificate of income earned in Lithuania, it is possible to submit declarations to foreign tax authorities and recover part or even all paid taxes," says Ž. Janušauskas. The specialist emphasizes that certificates of income earned in Lithuania are not required by all foreign tax authorities, but only by Austria, Germany, and the Netherlands.
The good news are that taxes can be recovered even for the last 4-5 years. This means that those who worked abroad in 2015-2016 now have the last chance to get a tax refund. "In this situation, it is very important to take care of the documents required for the tax refund. This usually requires a document from the employer that contains information about the employee's income and taxes paid. Depending on the foreign country, other forms or payslips may be required. We are often approached by clients who do not have some or all of the required documents. However, even in this case, taxes can be refunded. The necessary documents are obtained by contacting the employer ", says the director of RT Tax Ž. Janušauskas.
The tax specialist states that after recovering taxes from a foreign state, it is not necessary to pay additional taxes in Lithuania: “After recovering part or all of the income taxes paid abroad, no obligations or tax liabilities arise in Lithuania with the tax authorities of many foreign countries, ”says Ž. Janušauskas.
The company estimates about 40-45 percent of Lithuanian citizens who worked abroad do not refund their taxes back. For instance, in 2018, Lithuanians did not recover 3.2 million euros. "As we can see from our calculations, Lithuanians leave huge sums for foreign tax inspectorates, and do not take back the income taxes legally due to them, when the money could serve each of us in this difficult period," says Ž. Janušauskas.
Any person may apply directly to the tax authorities of a foreign state for a tax refund. However, experience has shown that while it is not difficult to provide the necessary documents themselves, but in the further process people face problems that prevent them from recovering taxes. It is, therefore, recommended contacting tax recovery specialists.
