Construction, EU – Baltic States, Legislation, Lithuania, Taxation, Transport

International Internet Magazine. Baltic States news & analytics Wednesday, 21.11.2018, 22:25

Baltic States have agreed on VAT revenue distribution by Rail Baltica construction

BC, Vilnius, 22.06.2016.Print version
The three Baltic countries have agreed on the distribution of VAT revenue from the construction work on the European standard-gauge railway Rail Baltica, Lithuania’s Transport Minister has said, adding that a respective agreement has already been signed and Lithuania will retain VAT revenue from work carried out in the country, informs LETA/BNS.

“The procedure of payment of the value-added tax (VAT), or financial resources, has already signed by the three ministers, has already been agreed on,” Rimantas Sinkevicius said at a news conference on June 22nd.

 

In line with the agreed scheme, money would be distributed by the joint project venture and Lithuania would retain VAT revenue from work carried out in the country, he said, adding that Lithuania was satisfied with this principle.

 

Sinkevicius estimates that construction will basically cost nothing to the country since Lithuania will contribute 15 percent of the total funding to the project co-funded by the European Union (EU) and its budget will recover 21% of construction costs via VAT.

 

“21% will go back to the budget in the form of VAT hence, in this respect, Lithuania will get the railway for free,” the minister said.

 

However, the three countries once again failed to reach an agreement on the management board of the joint venture RB Rail at the meeting, which was held on Monday.

 

According to Sinkevicius, Lithuania wants to have its representative on the company’s board. However, Baiba Rubesa, chairwoman and currently the only member of RB Rail’s board, wants to issue an international competition for board members, who, in her view, should be selected based on qualifications, and not on representation of one or another country.

 

Lithuania has nominated Virgilijus Poderys, former CEO of the state-controlled holding company Epso-G and former chairman and currently the chief adviser of the National Commission for Energy Control and Prices, as its member on the board.






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