Author: avocad_bxgv12hf

The news that reached nearly a thousand Lithuanian carriers this summer regarding potential tax arrears from previous years on freight vehicles registered in Lithuania caused considerable tension in the transportation sector. Companies had to quickly assess their obligations spanning several years and their potential impact on cash flow.

Following a dialogue initiated and continued by LINAVA, the Lithuanian National Association of Road Carriers, with the Lithuanian Transport Safety Administration (LTSA), the Ministry of Finance, the State Tax Inspectorate, and the Ministry of Transport and Communications, a solution is taking shape that would give carriers more time to settle their accounts with the state. The LTSA has drafted a procedure for the installment payment of taxes on freight vehicles registered in Lithuania. It provides carriers whose tax arrears exceed 10,000 euros with the option to defer payment for six months—from January 1, 2027, to June 30, 2027—and pay in equal monthly installments.

LINAVA: It is important that the sector's arguments were heard

Discussions regarding the tax payment procedure began when carriers raised the issue—not of the tax obligation itself, but of the timeframe within which businesses must assess and pay the amounts accrued in previous periods.

In early September, the issue was discussed with the LTSA and later at the Ministry of Finance, with representatives from the ministry, the State Tax Inspectorate, and the transportation sector in attendance. One of LINAVOS’s main arguments is that significant obligations from previous periods were not included in the companies’ 2026 budgets, so paying them off in a short period of time could significantly impact working capital and the fulfillment of other financial obligations for some carriers. “From the very beginning, our position has been clear—carriers do not dispute their obligation to pay taxes. However, when it comes to obligations accrued in previous periods, businesses must be given realistic conditions to assess and fulfill them. We are pleased that the authorities have heeded the sector’s arguments and that the dialogue has shifted toward finding a concrete solution,” – says Narūnas Raulinaitis, Secretary General of the Lithuanian National Road Carriers’ Association “LINAVA.” According to him, the option to pay in installments would, first and foremost, provide companies with greater predictability and allow them to properly plan their cash flows.

It's important for carriers not to wait until the last day

Although the payment schedule is still being finalized, it is important for carriers to assess their potential tax liabilities from previous periods now. By October 1, companies need to have assessed their tax liabilities and calculated the amounts due. Meanwhile, according to the draft payment deferral procedure currently prepared by the LTSA, applications for deferral of arrears would be accepted until October 31, 2026. This is an important deadline: the draft stipulates that applications submitted after October 31 will not be considered. In the application, the carrier should specify the tax year, the license plate numbers of the vehicles for which the arrears were incurred, and the amount of arrears attributable to each vehicle.

E. Langys: It's important to consider not only the amount but also the payment terms

Egidijus Langys, managing partner and attorney at the AVOCAD law firm, says that the most important thing for businesses right now is to accurately assess their situation and prepare for the final regulations without waiting for the deadlines to expire. “In this situation, we are not talking about challenging the obligation to pay taxes, but rather about a proportionate way to fulfill this obligation. When a tax arrears has accumulated over a longer period, it is important for businesses to have a realistic opportunity to assess the amount, plan their cash flows, and properly settle their accounts with the government. From this perspective, paying in installments is a rational solution,” says E. Langys.

The attorney recommends that carriers begin organizing information now regarding the periods and vehicles for which arrears may have accrued, and accurately calculate the amount of those arrears. “The most important practical advice for companies is not to wait until the last day. They should assess not only the amount of the arrears but also whether the company will meet the conditions set forth in the final regulations. Companies with arrears exceeding 50,000 euros should be particularly careful—the draft imposes additional requirements for securing obligations on them,” notes E. Langys.

For arrears exceeding 50,000 euros—a bank guarantee or a pledge of assets

Under the draft prepared by the LTSA, the special payment plan would be available to entities whose tax arrears exceed 10,000 euros. However, for companies with arrears exceeding 50,000 euros, an additional and financially significant condition is stipulated. If an agreement is entered into regarding tax arrears exceeding 50,000 euros, the carrier must, no later than January 1, 2027, provide the LTSA at its own expense with one of two measures to secure the fulfillment of its obligation: an extract from the mortgage registry or a bank guarantee.

If you choose to pledge property as collateral, an extract from the mortgage registry should confirm that the value of the pledged property is not less than the amount of the tax arrears specified in the contract.

If a bank guarantee is chosen, its amount should also be no less than the total amount of the arrears specified in the contract, and the guarantee itself should remain valid until at least September 30, 2027.

This means that transportation companies with larger outstanding balances should assess in advance not only the payment schedule but also the costs and options for securing the future obligation—whether the company will be able to pledge assets of sufficient value or will need to approach a bank for the necessary guarantee.

The payment plan would not be interest-free either—interest would be charged on the remaining balance. If the agreed-upon payment schedule is not followed, the project provides for a late payment penalty of 0.1% for each calendar day past due.

Payments would be spread out over six months—from January 1, 2027, to June 30, 2027—in equal monthly installments.

The LTSA notes that the purpose of the proposed regulation is to balance two interests: to enable carriers experiencing temporary financial difficulties to continue their operations, while at the same time ensuring that the fee is paid into the state budget.

Effective October 1, 2026, the procedure for reducing per diem allowances paid to employees on business trips will change. These changes are particularly relevant to the transportation and logistics sector, where business trips are a routine part of work organization. Egidijus Langys, managing partner and attorney at the law firm AVOCAD, says that this change is important for carriers not only because of the new formal requirements. In the transportation sector, per diem allowances are a significant part of work organization and employee costs, so any change in regulation has a direct impact on companies’ day-to-day operations. “It is important for carriers not only to know that the rules are changing starting in October, but also to understand how they will affect the actual organization of work. In the transportation sector, per diems are not a one-off administrative issue—they are a system applied daily to hundreds or even thousands of trips. Therefore, the most important thing now is to assess your own practices and prepare for the changes before they take effect,” says Egidijus Langys, managing partner at AVOCAD.

AVOCAD attorney Viktorija Dubovskienė points out that, before October, carriers should not only familiarize themselves with the new rules but also review their companies’ existing internal documents and actual practices for setting per diem allowances. “The topic of per diems is not new to carriers, but in practice we still see situations where a company’s internal documents leave too much discretion to the decision-making manager or responsible person. It is precisely these vague rules that can become a problem in the event of a dispute,” says V. Dubovskienė.

It is not enough to meet the minimum threshold until October

Under the current regulations, an employer may pay per diem allowances that are lower than the maximum amounts set by the government; however, such a reduction must be properly documented in the company’s records.

It is important to note that simply setting a minimum allowable daily allowance is not enough. Lower amounts must be specific, and their application must be justified by objective circumstances.

In case law, the reduction of per diem allowances is primarily linked to their purpose—to compensate for an employee’s additional expenses during a business trip. Therefore, the most reliable criteria are those that actually reduce such employee expenses, such as meals, lodging, or other conditions of the business trip provided or paid for by the employer.

Meanwhile, linking the amount of per diem allowances to an employee’s length of service, work quality, violations committed, damages, or other criteria for evaluating an employee’s performance is significantly riskier. “Per diem allowances should not become a means of incentivizing or disciplining an employee. If a lower amount is set solely because the employer is dissatisfied with the driver’s performance or a violation committed, there is a risk that such a reduction will be deemed unjustified,” notes V. Dubovskienė.

Another problematic practice is when a company’s rules establish a broad range of possible per diem amounts, but the specific amount is then chosen at the discretion of the manager or the person in charge after the business trip. It must be clear to the employee in advance what amount of per diem they are entitled to and what factors determine that amount.

Starting in October—a simpler but more strictly defined system

 Effective October 1, the system for reducing per diem allowances is changing. Since the new rules have yet to take effect, there is no case law regarding their application at this time; however, the regulation itself sets clearer limits for employers.

In companies with a collective bargaining agreement, it will still be possible to agree on lower per diem rates, provided that the minimum limits set by law are observed.

Meanwhile, for companies without a collective bargaining agreement, the duration of the business trip will be a key factor. For shorter business trips, daily allowances cannot be reduced, while for longer ones, a reduced rate may be applied, but only in compliance with the established minimum threshold. “In a sense, the new rules will simplify matters for employers, as there will be less need to develop complex systems of criteria for reducing per diem allowances. However, this also creates a very clear obligation to decide in advance what amount of per diem allowance will be paid during a specific business trip,” explains V. Dubovskienė.

The driver must know the daily allowance amount before departing

One of the most important practical changes concerns employee notification. If an employee is to be paid a per diem rate lower than the maximum, he or she must be notified in writing of the specific amount set for that business trip before the trip begins. This means that carriers will have to abandon the practice of sending a driver on a trip without knowing the final per diem amount, which is then determined later based on the driver’s performance or other circumstances. Starting in October, a separate rule will also apply to very short first or last days of a business trip—in such cases, only a portion of the established daily allowance will be paid.

According to Langis, practical preparation should be the top priority for carriers right now. “September should be a month of preparation for transportation companies. Waiting for the first disputes or inspections to arise and only then changing internal rules would be the most costly approach. It is much safer to assess now whether the company’s documentation, the employee notification process, and actual practices will comply with the new regulations,” emphasizes AVOCAD’s managing partner.

What should carriers do right now?

According to V. Dubovskienė, in September, transportation companies should first review their current rules for paying per diems. Particular attention should be paid to vague wording that allows the amount of the per diem to be determined “at the employer’s discretion,” taking into account “the quality of work,” “violations committed,” or other subjectively assessed criteria.

At the same time, we should prepare for the new regulations that will take effect in October and establish a simple mechanism for informing drivers in writing, before they leave on a business trip, of the daily allowance amount applicable to them. “We would recommend that carriers view this change not as just another paperwork adjustment. It is a good opportunity to streamline the entire process of determining per diem allowances so that it is uniform, clear, and as independent as possible from the decisions of individual managers. The simpler and more transparent the system, the lower the risk of disputes for both the employer and the employee,” says Viktorija Dubovskienė, an attorney at AVOCAD.

The new regulations should provide carriers with greater clarity, but they will also require advance preparation. Therefore, for companies that pay per diem rates lower than the maximum, September is a good time to review their internal policies and prepare for changes effective October 1.

Today, you can purchase a public transportation ticket in Vilnius in just a few moments—using a mobile app, a contactless bank card, or another method of your choice. However, simply purchasing a ticket does not always mean that the passenger is traveling legally. Depending on how the ticket was purchased, the circumstances of its activation, the moment it becomes valid, its specified validity period, and the passenger’s actions during the trip all become important factors.

Experience shows that passengers often find themselves in situations where they have to pay a fine for their trip not because they are trying to avoid buying a ticket, but because they are unaware of or misunderstand the applicable regulations—such as when the inspection begins, whether a new ticket is required when transferring to another mode of transportation, and how a situation is assessed when a 30-minute ticket is insufficient to complete the journey due to traffic congestion or other circumstances beyond the passenger’s control. “At first glance, the public transportation ticketing system may seem very simple to a passenger—you buy a ticket and ride. However, from a legal standpoint, it is not only the fact of purchasing the ticket that matters. It also matters whether the ticket was activated properly and on time, whether it is still valid at the time of inspection, and—when using a discount—whether the passenger can prove their eligibility for it. “It is precisely these circumstances that, in practice, can determine whether a passenger’s trip will be considered lawful,” says Sandra Mickienė, a senior attorney at the AVOCAD law firm.

Where can a passenger find up-to-date information?

All individuals using public transportation in Vilnius should first familiarize themselves with the rules for using public transportation so that they can properly understand their rights and responsibilities and comply with them while traveling.

Current legislation and other documents regulating passenger transportation and passenger control are available to the public on the JUDU website under the “Legislation” section. There you can find, for example, the Rules for the Carriage of Passengers and Baggage on Vilnius City Municipality Public Transportation, the Rules for Using the “m.Ticket” App, the JUDU (Vilniečio) Card, the procedure for purchasing electronic and paper tickets and/or using and refunding funds in the e-wallet, as well as other documents.

In addition to the regulations, passengers may find it helpful to review the JUDU Frequently Asked Questions (FAQ) section, which provides answers to many specific questions regarding ticket purchase, activation, validity, transfers, discounts, and passenger inspections. Although the FAQ is not a legal document, this information helps provide a better understanding of how the applicable rules work in practice. “Passengers certainly don’t need to know all the legal regulations by heart, but before using a specific type of ticket, it’s worth knowing the basic terms of use. This is especially relevant when using a mobile app, discounted tickets, or planning a longer trip with transfers. The rules and practical explanations published by JUDU allow you to check in advance how you should proceed in a specific situation,” notes S. Mickienė.

Ticket Activation and Start of Passenger Inspection

One of the situations that can lead to disputes between passengers and ticket inspectors is the improper or late activation of a ticket.

According to the Vilnius City Public Transportation Rules, the start of passenger inspection is not tied to the moment when the inspector boards the vehicle or approaches a specific passenger to check their ticket. Passenger inspection begins when the vehicle approaches the entrance to a stop where inspection is conducted, or a stop without an entrance, and the driver or another authorized person activates the ticket validators installed on the vehicle.

Therefore, as soon as a passenger boards a vehicle—and before reaching the next stop where ticket inspections may take place—if they do not have a valid ticket, they must purchase one immediately and activate it properly. The ticket must be validated before the start of the ticket inspection so that, at that moment, the passenger is considered to have a valid ticket. “It is important to understand that the start of the inspection is not the moment when the passenger sees the inspector or when the inspector approaches to check a specific ticket. The rules define this moment differently—it is linked to the vehicle’s arrival at the stop where the inspection is taking place and the locking of the ticket validators. Therefore, validating the ticket only after seeing the inspector may be too late,” notes the senior lawyer at AVOCAD.

The method for activating a ticket depends on how it was purchased.

When using the JUDU / Vilniečio card, you must tap it on the ticket validator, select the ticket you want to activate, and then tap the card again to confirm your selection. If the card contains different types of tickets, the ticket validator allows you to choose which ticket to activate.

An e-ticket purchased via the mobile app is activated within the app itself by completing the activation process. The activation process takes 15 seconds; therefore, the ticket is not considered valid until the activation process is complete and the app confirms that the ticket has been activated. “These 15 seconds may seem like an insignificant technical detail, but they can become very important in the event of an inspection. Passengers who choose to use the mobile app should begin the activation process immediately upon boarding the vehicle. The ticket is considered activated only once the activation process is complete, so you should not wait until the next stop or until an inspector appears,” explains S. Mickienė.

Another option is a contactless bank card. You can use it to purchase a 60-minute ticket on Vilnius public transportation; however, discounts do not currently apply to this ticket. The ticket is purchased by tapping a physical bank card on the ticket validator or by using a phone or watch with the appropriate payment method installed. A successful purchase is confirmed by a message displayed on the ticket validator’s screen and an audible beep.

In practice, there are cases where a passenger, after boarding a public transportation vehicle, forgets to validate their ticket and does so only, for example, upon noticing a ticket inspector boarding the vehicle. In such a case, the mere fact that the ticket has already been validated by the time the ticket inspector checks the passenger does not in itself mean that the passenger had a valid ticket at the time the inspection began.

It is determined when the ticket was actually validated and whether this occurred before the start of fare inspection, i.e., before the vehicle arrived at the stop where fare inspectors conduct inspections and the driver or another authorized person locked the ticket validators.

If it is determined that the ticket was activated after the start of the inspection, it is considered that the passenger did not have a valid ticket at the time the inspection began. In such a case, the subsequent activation of the ticket does not change this fact. “In other words, during an inspection, what is assessed is not only what the inspector sees on the passenger’s phone at the exact moment of the check, but also when the ticket actually became valid. If it was activated after the inspection had already begun, the subsequent activation does not negate the fact that there was no valid ticket at the start of the inspection,” the lawyer emphasizes.

However, if it is determined that the passenger had not properly validated their ticket at the time the inspection began, they may be given the opportunity to avoid administrative liability by purchasing an inspection ticket during the inspection. An inspection ticket is intended for cases where it is determined during an inspection that a passenger is traveling without a properly validated or activated ticket.

A fare ticket costs 15 euros and can only be paid for with a bank card. Once purchased, the ticket is valid for two hours from the time of purchase, provided the passenger does not exit the vehicle.

If a passenger is unable to pay for a ticket using non-cash payment methods, the ticket inspector has the right to remove that passenger from the vehicle and, in accordance with the procedure established by law, issue a report of an administrative offense for traveling without a ticket. In such a case, the passenger is subject to the administrative liability set forth in Article 446(4) of the Code of Administrative Offenses of the Republic of Lithuania (ANK)—a fine ranging from 16 to 30 euros.

Discounted ticket: simply being eligible for the discount is not enough

The Law on Transportation Benefits of the Republic of Lithuania establishes the categories of persons who are entitled to use public transportation on preferential terms and to purchase tickets at a fixed discount. These include schoolchildren and students, persons with disabilities, persons who have reached a certain age, their accompanying persons, and other groups of persons specified in the law. However, simply belonging to one of these categories is not enough. A passenger may take advantage of a transportation discount only if they have a valid document confirming their right to the relevant discount and present it upon request by a ticket inspector.

“It’s important to distinguish between two things here—a person’s actual right to a discount and the ability to prove that right during a ticket inspection. For example, a passenger may indeed be a student and be entitled to a discounted ticket, but during a ticket inspection, they must be able to verify this right with the required document. Simply explaining that the document was left at home is not enough,” says S. Mickienė. If a passenger does not have such a document—for example, if they forgot it at home—they cannot properly substantiate their right to a discounted fare during a ticket inspection. In such a case, administrative liability as provided for in Article 446 of the Code of Administrative Offenses may apply. When a passenger does in fact have an objective right to a discount and has purchased the corresponding ticket, but fails to present a document proving this during an inspection, their action is classified under Article 446, Paragraph 2 of the Code of Administrative Offenses, which provides for a lighter fine—ranging from 10 to 14 euros.

When a person is not generally entitled to any discount but travels with a discounted ticket, their action is considered equivalent to traveling without a ticket under Article 446, paragraph 4, of the Code of Administrative Offenses. This carries a stricter fine—ranging from 16 to 30 euros. “These situations should not be conflated. It is one thing to be entitled to a discount but fail to present a document confirming it during an inspection, and quite another to knowingly use a discounted ticket when one is not entitled to a discount at all. The liability provided for in the legislation differs accordingly,” explains an AVOCAD attorney.

Discounted Tickets for Students: What Do You Need to Know?

Students who meet the conditions set forth in the Law on Transportation Discounts of the Republic of Lithuania are eligible for an 80 percent discount on single-ride and multi-ride tickets on Vilnius public transportation.

Students at institutions of higher education enrolled in full-time study programs are eligible for this benefit if they are citizens of the Republic of Lithuania, other European Union member states or European Economic Area states, or are family members of such citizens, and are enrolled in full-time study programs at institutions of higher education in European Union member states or European Economic Area states.

However, simply having the right to a transportation discount is not, in and of itself, sufficient grounds to use a discounted ticket during a trip. A passenger who has purchased and activated a discounted ticket must carry a valid document confirming their eligibility for the applicable transportation discount and, upon request by a ticket inspector during a ticket inspection, present it.

Students may prove their eligibility for the discount by presenting a student ID issued by their school or university, or a valid ISIC card, provided that the educational institution in question is located in the European Union.

In practice, there is also the case of students who are just beginning their studies and have not yet been issued a student ID. The mere fact that a student does not yet have a student ID card does not in itself prevent them from taking advantage of student transportation discounts. Generally, until October 1, it is sufficient to have a certificate issued by the educational institution confirming student status and to present it during a fare inspection.

“This is particularly relevant at the start of the new academic year. A first-year student may have been legally admitted to a program but may not yet have received their student ID card. In such cases, it is important to obtain a certificate from the educational institution in advance, which would allow the student’s status to be verified during an inspection. So it is not only the student status itself that matters, but also the ability to properly prove it,” notes S. Mickienė.

If a student is actually entitled to a transportation discount but fails to present a document confirming this entitlement during an inspection, he or she may be subject to a fine of 10 to 14 euros, as provided for in Article 446(2) of the Code of Administrative Offenses.

The ticket's validity period is not the same as the duration of the trip

Another common misconception is that a ticket purchased and activated on time remains valid until the end of the trip, even if the trip itself lasts longer than the ticket’s validity period. However, a ticket’s validity period is not tied to the duration of the passenger’s trip. It is calculated from the moment the ticket is activated and depends on the type of ticket selected. For example, a 30-minute ticket is valid for 30 minutes from the moment it is activated, and a 60-minute ticket is valid for 60 minutes. “Passengers naturally sometimes expect that if they board a vehicle with a valid ticket, they will be able to ride to the final stop with it. However, the rules work differently—a ticket is valid for a specific period of time. Therefore, even if the trip is delayed due to traffic congestion or other circumstances beyond the passenger’s control, a new ticket must be purchased and activated once the old one expires,” explains S. Mickienė.

Therefore, if the trip is delayed due to traffic congestion or other reasons and the ticket expires before the passenger reaches the final stop, the mere fact that the ticket was purchased and activated on time does not entitle the passenger to continue the journey. In such a case, the passenger must purchase and properly validate a new ticket in order to continue the journey. On the other hand, the validity period of a ticket is not tied to a specific vehicle. For example, a passenger who has activated a 60-minute ticket may transfer from one bus or trolleybus to another during that time and continue using the same ticket, provided it has not expired.

“Transferring to another bus or trolleybus does not automatically mean you have to buy a new ticket. If a 30- or 60-minute ticket is still valid, the passenger may transfer to another bus or trolleybus within its validity period. The key criterion is not the number of vehicles, but whether the ticket’s validity period has expired,” the lawyer emphasizes.

What's the most important thing for a passenger to remember?

In summary, S. Mickienė highlights several of the most important rules from a practical standpoint that passengers should keep in mind:

1. You must not only purchase a ticket but also activate it properly. This is especially important when using the mobile app, as ticket activation is not instantaneous—15 seconds must pass after confirmation of activation. Only then is the ticket considered activated, and the passenger has a valid ticket.
2. The start of the inspection is not the moment when the inspector approaches a passenger. The start of the inspection is linked to the vehicle’s arrival at the relevant stop and the activation of the ticket validators, rather than the moment when the inspector physically boards the vehicle or approaches a specific passenger being inspected. Therefore, the ticket must be purchased and validated before the vehicle arrives at the stop where the inspection will take place and before the ticket validators are activated.
3. When using a discounted ticket, you must have a document confirming your eligibility for the discount. Passengers eligible for a specific discount must present a document confirming this fact upon request by the ticket inspector during a ticket inspection. Failure to have or present such a document may result in a fine.
4. When transferring to another vehicle, it is not necessary to purchase a new ticket if your current ticket is still valid. 30- and 60-minute tickets allow for unlimited transfers to another bus or trolleybus during their validity period, so simply transferring to another vehicle does not in itself mean you need to buy a new ticket.
5. The validity period of a ticket is not tied to the actual duration of the trip. The passenger must take note of the ticket’s validity period—no grace period applies. Once the specified validity period has expired, the passenger may no longer use the same ticket solely because the trip was objectively delayed through no fault of the passenger or for reasons beyond their control. In such a case, a new ticket must be purchased and activated.

“Most of these situations arise not because passengers intentionally try to ride without a ticket, but because they are unaware of the practical rules. Therefore, the simplest way to avoid an unpleasant dispute during an inspection is to validate your ticket immediately upon boarding, keep track of its validity period, and, if you’re using a discount, always have the document confirming it on hand,” summarizes Sandra Mickienė, a senior lawyer at AVOCAD.