Is Lithuania’s Measure Combating VAT Avoidance Compatible with the VAT Directive?

Under the Lithuanian VAT Law, where the same person controls several legal persons, all the legal persons under his control and he himself (where he himself conducts economic activities) must file applications to be registered as a taxable person for VAT purposes if their total turnover is higher than EUR 45,000 (registration threshold for small businesses) over the last 12 months, irrespective of the fact that the turnover of each separate person is lower than that. In this article, the author analyses if, with this provision, Lithuania has implemented VAT grouping under article 11 of the VAT Directive, and if the Lithuanian VAT grouping provision for registration purposes follows the conditions set by the VAT Directive.