When and why complaints are referred back to the tax administrator for re-examination
The Tax Disputes Commission has the authority, in certain cases, to refer a taxpayer’s appeal to the central tax administrator for reconsideration. This provision is set forth in Article 155(4)(5) of the Tax Administration Act (MAĮ). This option applies only in cases where there is a legal basis—that is, when significant circumstances are identified that prevent the adoption of a lawful and well-founded decision regarding the dispute.
The case law of the Supreme Administrative Court of Lithuania (hereinafter “SAC”) explains that a legal basis arises in the event of material procedural violations or when not all relevant circumstances of the case have been examined, without which it is impossible to render a well-founded decision. In such cases, the case requires an additional verification of factual data or a repetition of administrative procedures, which can only be performed by the central tax administrator.
It is important to note that the Tax Disputes Commission is not authorized to calculate taxes due—this function, pursuant to the provisions of Article 66(2) of the Tax Administration Act, belongs solely to the central tax administrator. Therefore, when new factual circumstances arise during a dispute or evidence is submitted to the Commission that was not assessed during the previous audit, the Commission cannot assess them independently—this requires an additional investigation to be conducted by the central tax administrator.
The practice of the Supreme Administrative Court of Lithuania emphasizes that the emergence of new evidence during the Commission’s proceedings should not lead to a different interpretation of the facts merely because the tax administrator did not have the opportunity to properly assess it. Such a situation is considered a fundamental violation of the tax dispute proceedings, which can only be remedied by referring the appeal for reconsideration.
In the Commission’s practice, decisions on re-examination are most often made when new evidence appears in the case file that the tax administrator was unable to verify; when it is necessary to recalculate taxes based on the Commission’s analysis of the facts; or when not all relevant circumstances have been examined in the case. Such cases include situations where the tax administrator bases its decision on one or more documents without taking into account other case data; where tax bases are improperly applied using indirect methods or determination rules; when the content of the decision does not comply with the requirements of the Public Administration Act or does not address some of the taxpayer’s comments; or when the tax administrator and the taxpayer provide conflicting information regarding the same circumstances. There are also cases where the failure to refund the personal income tax overpayment indicated by a resident in their tax return is recognized as a tax dispute, but the compliance of this situation with the provisions of Article 87 of the Tax Administration Act is not assessed, or when deciding on the refund of overpayments, the statute of limitations for different taxes is not taken into account. Other situations may be related to changes in judicial practice or a failure to assess jurisdictional issues between states regarding the possibility of taxation.
It should be noted that repeat audits are often initiated by the taxpayers themselves, who file complaints with the Commission and point out significant shortcomings in the audits conducted. After the Commission reviews such complaints and determines that the taxpayer’s arguments are well-founded, a decision is made to refer the complaint to the central tax administrator for reconsideration. In this way, the Commission, relying on the case law established by the Supreme Administrative Court of Lithuania, seeks to ensure that tax disputes are resolved lawfully, reasonably, and objectively.
Last updated: 18-05-2026
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