Tax regulation mechanism (Relief from Excise Duty)

Updated: 26.09.2017

Author: Jurga Tallat-Kelpšaitė

Excise tax relief applies to transport biofuels produced from biomass. The excise tax rate is reduced in proportion to the percentage of biomass per tonne of biofuel. The relief applies to bioethanol, biodiesel, bio-ETBE and vegetable oil. To be eligible under this support scheme, biofuels must comply with the mandatory statutory quality and other requirements, established standards and European norms (Chapter III Art. 40 Law on Excise Taxes).

Eligible technologies

Transport biofuels produced from biomass are eligible for excise tax relief (Chapter III Art. 40 Par. 1 Item 4 Law on Excise Taxes).

Biofuels

The relief is applicable to bioethanol, biodiesel, bio-ETBE and vegetable oil (Chapter III Art. 40 Par. 1 Item 4 Law on Excise Taxes).

Amount

For organic biofuel blends (only organic additives) of at least 30%, the tax relief is proportional to the percentage of organic additives. Biofuels produced entirely from materials of organic origin are fully exempt from excise duty. For other biofuel blends, the tax rate is reduced in proportion to the percentage of biofuels exceeding the mandatory percentage (Chapter III Art. 40 Law on Excise Taxes).

Addressees

Producers of biofuels from biomass (Chapter III Art. 40 Par. 6 Law on Excise Taxes).

Procedure

Process flow

The producer must notify the competent County State Tax Inspectorate no later than three days before the start of biofuel production by submitting a completed standard notification form. In addition, the producer must obtain authorisation from the County State Tax Inspectorate, allowing for the excise tax relief (Chapter III Art. 40 Par. 6 Law on Excise Taxes; Chapter II Item 3 Order No. VA-79/2004; Chapter I Item 4 Order No. VA-75/2004).

Competent authority

The implementing and monitoring institution is the State Tax Inspectorate of the Ministry of Finance of the Republic of Lithuania (Chapter I Art. 21 Par. 1 Law on Excise Taxes).

Distribution of costs

State

The costs of tax relief are borne by the state.

Lithuania

Further information

  • Valstybinė mokesčių inspekcija prie Lietuvos Respublikos finansų ministerijos - State Tax Inspectorate under the Ministry of Finance of the Republic of Lithuania
  • +370 5 266 8200
  • State Tax Inspectorate website
  • vmi(at)vmi.lt