Lithuanian Tax Authority clarifies VAT rules on gifts and samples

The Lithuanian Tax Authority has issued guidance on how gifts, product samples, and free goods are treated under VAT law.

Small-value gifts and free samples distributed to potential buyers — such as food items, low-value promotional goods, or gifts tied to purchases — are generally not considered taxable supplies. These are treated as legitimate business expenses rather than private consumption.

The rules also cover situations like:

• Business partner gifts
• Contest or lottery prizes
• Free product samples used for testing or research

In these cases, VAT treatment depends on whether the goods qualify as promotional or are deemed private consumption.

The clarification explains that certain advertising and representation expenses are not considered gifts, meaning they fall outside VAT gifting rules.

For VAT-liable gifts, businesses must determine the taxable value, apply the correct VAT rate (including possible reduced rates), and meet documentation requirements.

Special rules apply to donated goods where input VAT was not deducted or assets have already been depreciated.