Lithuania

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• Virtual currency exchange services and wallet services are not considered financial services and are thus exempt from VAT.
• Services performed and accounts paid in virtual currencies are subject to standard VAT laws.
• Profits from the cryptocurrency corporation are taxed at a rate of 15%. A small business with fewer than ten employees and less than 300,000 euros in gross yearly income may be subject to a 0-5% corporate tax rate.
• Income Taxes (WHT) of 15% is charged on distributed profits (dividends paid).

Lithuania Centre of Register is the Lithuanian supervisory body for VASP's Register of licensed crypto companies, but activities related to virtual assets are supervised by Financial Crime Investigation Service (FCIS) - a law enforcement agency under the Ministry of the Interior that is part of the international network of Financial Intelligence Units. FCIS actions aim to prevent money laundering, terrorist financing, and sanctions violations. The Lithuanian FIU is also in charge of financial crime investigations, such as VAT and other tax evasion, money laundering, and illicit receipt or use of EU financial support. 

FCIS participates actively in the National Crime Prevention and Combating Corruption Program and is continually creating techniques to engage society in the fight against financial crime. This authority issues orders on a regular basis outlining specific sections of AML/CTF legislation that are directly applicable to the relevant required companies.

FCIS typically supervises crypto firms through targeted examinations that are organized a year in ahead. FCIS publishes a list of enterprises that are being overseen in this manner at the start of the year, but unplanned targeted surveillance is also feasible in specific circumstances.

In 2023, FCIS will also implement regular reporting for VASPs, which will be done annually. Such an approach will very probably increase market openness and allow for a more effective supervisory approach.

Other supervisory authorities: the Bank of Lithuania, Chambers of Notaries, Auditors.

Yes, an AML Officer.

Lithuanian AML law requires VASPs to nominate an AML Officer (leading employee) who will organize the implementation of the AML law's money laundering and/or terrorist financing prevention measures and collaborate with the FCIS. Furthermore, if the company is governed by a board, a board member must be appointed to organize the implementation of money laundering and/or terrorist funding prevention measures. Such staff and board members must be notified in writing to the FCIS within 7 working days of their appointment or replacement.

The AML Officer chosen must have the relevant education, work experience, and skills to apply a risk-based approach throughout the organization. Furthermore, the person's reputation is quite important here. 

Following the implementation of the new laws, the AML Officer appointed to a crypto company must be a permanent tax resident of Lithuania, and appointments to more than one VASP are prohibited, so each company with its own AML Officer.

Sanctions for noncompliance with the AML/CTF legislation

There are numerous supervisory authorities (e.g., the Bank of Lithuania, Chambers of Notaries, Auditors, and so on) that are responsible for imposing fines on required companies, but only FCIS may perform inspections, issue orders for the removal of deficiencies, and impose fines on VASPs.

According to Lithuanian AML law, the following actions may be implemented to ensure compliance with VASP regulations:

• Imposition of a fine; 
• Temporary or permanent removal of top management or other personnel and/or loss of their rights; 
• Temporary or permanent suspension of activities and/or prohibition on the provision of services;
• Revocation of license issued.

According to the new regulation, a share capital of 125 000 euros is required to receive the license. The conditions for entrepreneurs looking to create a crypto firm in Lithuania have been strengthened since November 1st, 2022, preparing for MiCA Directive taking place in 2024.

If this amount is to big for you, as a start-up, contact us for evaluation and we can deposit this amount for your project in the 1st year. COINsiglieri is trying to help start-ups to navigate this requirements.

Realistic term for a new, from scratch company, is 3-5 months.

But, we sometimes have ready-made solutions that can take no more than 2-3 weeks. Just ask us about what we have available.

No, there are no required financial audit regulations in Lithuania. However, the regulatory body may undertake periodic audits to ensure that businesses are in compliance with applicable legislation and industry standards.