In recent years, the number of self-employed foreigners avoiding taxes has been on the rise in Lithuania. According to the State Tax Inspectorate (VMI), the majority of those failing to meet their tax obligations are taxi drivers and couriers.
Lithuanian social democratic MP Laurynas Šedvydis has taken an interest in this topic following the viral story of the deportation of the Vietnamese nationals who ran a restaurant in Šiauliai.
“Representatives of the tax authorities have presented really worrying data that there has been a significant increase in the number of third-country nationals who do not comply with their tax obligations and who work on a self-employed basis,” Šedvydis told LRT.lt.
According to VMI data, in 2023 there were 15,800 foreigners in Lithuania who registered their individual activity. Of these, 12,400 filed income tax returns, but 2,200 did not fulfil their tax obligations. A further 3,300 foreigners did not file value added tax (VAT) returns, although they were obliged to do so.
While the VMI does not yet have data for 2024, data from previous years show that the number of foreigners in Lithuania who are both self-employed and do not pay income tax is increasing.
According to VMI, foreigners who avoid income taxes most often work as couriers, taxi drivers, or in the fields of construction completion and finishing, as well as beauty services.
Provide information
According to Piret Pert, Wolt’s Communications Manager for the Baltic States, the company is providing monthly information to VMI on the income of all couriers, restaurants, and other traders operating through its food delivery platform.
“Therefore, VMI has up-to-date information on 100 percent of the revenue generated through Wolt’s platform. We have done everything we can to ensure that the relevant Lithuanian authorities have an accurate picture of all the income earned through our platform,” Pert told LRT.lt.
“Courier partners are not employees of Wolt but independent business partners who are responsible for their own tax obligations. Lithuanian legislation does not give Wolt the right or the possibility to check whether the courier partners are accountable to the VMI,” she explained.
Pert also noted that Wolt informs its courier partners about their personal tax obligations before they start working via the platform.
“Wolt also provides all courier partners with free access to Deepfin, a professional service specifically designed for individual taxpayers. This tool helps couriers to navigate the Lithuanian tax system and assists them with their tax obligations and filing,” the Wolt representative said.
Losing permits
According to Laimonas Jakštys, Operations Manager for Bolt’s ride-hailing services, foreign nationals currently account for around 20 percent of the drivers who use the platform, with around half of them being Ukrainian.
Over 99 percent of foreigners who provide ride-hailing services via the Bolt platform are not obliged to register for VAT, as the total value of their services per year does not exceed 45,000 euros, he noted.
The Bolt representative pointed out that the drivers are self-employed and therefore have to take care of their own tax obligations.
“To make it as easy as possible for them to do so, we regularly remind drivers by emails and other means of communication about tax filing deadlines and other important details. In addition, for the last few years, Bolt has been declaring the income of drivers who have used the platform to the tax authorities, making the declaration process easier for drivers,” Jakštys said.
“It is important to note that if drivers are in debt to the state, they will lose the permit issued by the Lithuanian Transport Safety Administration to provide transport services. If we learn that the permit is not valid, we will stop the driver’s access to the Bolt platform,” he added.
Leaving without paying
Linas Mazgeika, a representative of the Courier Association in Lithuania, noted that it is not only foreigners who evade taxes but also Lithuanians.
Talking about foreign workers, he said platforms, such as Wolt and Bolt, should take more responsibility for controlling partner couriers and drivers and informing them about their tax obligations.
According to Mazgeika, however, the main problem is foreigners who leave Lithuania without paying their taxes.
“What should we do? Should we prevent people from leaving the country without paying their taxes? Maybe they could pay every month. Maybe they should be obliged to pay more often than once a year,” he said.
The VMI also notes that it cannot do anything about foreigners who have left Lithuania.
“It is not possible to apply to these taxpayers the administrative liability measures applicable to Lithuanian taxpayers who do not comply with the obligation to declare or pay personal income tax due to the different enforcement of the requirements to declare or pay,” the inspectorate writes in a letter to MP Šedvydis.
The Courier Association representative also pointed out that this issue creates hostility between Lithuanian and foreign couriers in the country.
“There is hostility towards third-country nationals. Hostility is not good. I noticed that the platforms are interested in increasing this hostility. The working conditions are not enviable, many immigrants are doing this work, and the locals accuse them of lowering the rates. But the platforms have all the means to control the rates,” Mazgeika said.
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