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Lithuania : Reduced risk of settlement of agricultural produce.

The social partners of the Ministry of Agriculture (MoA) and various agricultural associations have provided the Ministry with complaints for purchasers of small agricultural products for several years that do not oblige territorial state tax inspectorates (IMS) to provide information on past due debts for purchased agricultural produce.

Such a practice, as repeatedly emphasized by the social partners in its complaints, leads to situations where the legitimate expectations of agricultural producers are violated: they do not receive the money they receive from the small agricultural producers for the production provided in the contractual terms and therefore can not fulfill their obligations in the state in time budget, staff or suppliers. Often there are cases where vendors of this production risk even going bankrupt due to delays in the settlement of buyers of agricultural produce.

The Ministry of Agriculture has prepared a Draft Amendment to the Law on the Settlement of Agricultural Products (hereinafter referred to as the Draft Law) , which was approved by the Government of the Republic today , in order to improve the situation and reduce the risk to sellers of agricultural products due to delays in settlement .

What's up

Discussions with the social partners led to the unanimous opinion that it is necessary to significantly increase the number of small agricultural producers (trade companies, agricultural processing companies and other economic and public entities) who, like major purchasers of agricultural produce, would be obliged to provide TVMI with information on overdue debts.

After the entry into force of the amendment to the Law, information will be required by TVMI on a monthly basis to buyers (trading companies) of agricultural produce for which the Government establishes settlement terms, which will generate income of 1.5 million euros and more in the last accounting year. Until now, only those trading companies whose income during the mentioned period amounted to 2.9 million were the only obligations. euro and more.

Similarly, agricultural products processing companies, other households and public entities purchasing agricultural products for processing, processing, processing, use for the needs of their holding or for catering needs and / or selling, and whose income in the last accounting year is 0 , 3 mln. euro and more. Until now, only those purchasers of agricultural produce - processors, whose income during the reporting period amounted to 0.87 mln. euro and more.

The benefits of billing control are obvious

The adopted draft law will have a positive impact on the agri-food industry, as it will make it possible to further reduce the volume of overdue debts on purchased agricultural products. In this way, farmers' agricultural producers will be more favorable for the formation of their cash flows more equitably, in time to settle with the state budget, employees and suppliers.

The obligation to provide information to TVMI about the resulting overdue debts for purchased agricultural products to the Government of the Republic in accordance with the established procedure for purchasers of agricultural products, for which the Government has set payment deadlines by a resolution, was introduced in 2009. The entry-level control of the settlement has greatly reduced the amount of overdue amounts of debt to sellers of this product. For example, in 2017 December 1 they amounted to 4.3 million and in 2010 1 June According to the data, even 23.4 mln. euro

According to the data of the State Tax Inspectorate, buyers of agricultural products - trading enterprises, whose income in 2016 amounted to 2.9 million There were 341 euros and more. Trading companies with a revenue of 1.5 to 2.9 million. 1982. The State Tax Inspectorate also informed the MoMA that the number of agricultural products processing companies, other economic entities and public entities whose income in 2016 will be increased. amounted to 0.87 million. There were 462 euros and more, and those with a revenue of 0,3 to 0,87 million. EUR 498.

Upon adoption of the Draft Law, about 3-5% of the total amount of debts incurred by the purchasers of agricultural products which may arise from the obligation to provide TVMI information (according to the notification form FR1070). of the total number of potential buyers of this production. It needs to be noted that the obligation to provide information in the prescribed manner to TVMI does not affect all buyers of agricultural products, but only those which will result in the payment of past due debt for purchased agricultural products, for which the Government sets payment deadlines.

If the Seimas of the Republic of Lithuania is able to consider and adopt the draft law at this spring meeting, amendments to the law should come into force on 1 November this year.

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Publication:Mena Report
Date:Mar 16, 2018
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