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.