top of page

Ministry of Finance has published ICO Guidelines

In its media release of 8th June 2018, the Ministry of Finance of the Republic of Lithuania published long-awaited Guidelines on Initial Coin Offerings (ICO) which address the most significant issues and gives clarity with respect to treatment of tokens from regulatory, taxation and accounting perspectives

What are ICOs​?

ICO is any initial coin (token) offering with the purpose of attracting capital or investment for the development of a new product or service, company or its activity. On the side of the issuer, the collected funds are typically used to finance a project (e.g. the building of a software).


The guidelines emphasize that ICO are not regulated by specific regulation yet, however, in some cases ICO may be subject to requirements of the Lithuanian legislation.

Applicable legislation​

If the token issued during ICO does not grant profits or governance rights, i.e. it either grants rights to use a product or service, or is used as a payment instrument, or a payment received for the token is considered as charity, then such token is not regulated.

In case the token grants profits or governance rights, depending on the specific features of the token, number of laws may apply to such token as it may be considered as a security token or financial instrument etc.


Corporate Income Tax and Personal Income Tax

In terms of Corporate Income Tax and Personal Income Tax, the virtual currency is recognized as current assets that can be used as a settlement instrument for goods and services or stored for sale.

In cases when tokens issued through ICO are not considered as securities or an advance payment for goods or services, but only confirm the fact of the payment without granting any rights, the funds collected are recognized as the income when the tokens are transferred (issued).

Income of residents from purchase-sale of virtual currencies, or from sales of produced virtual currency may be charged as income from individual activities, if such activities satisfy the aggregate criteria of continuity, autonomy and pursuit of economic benefits.


Income received from individual purchases and sales of virtual currencies will be taxed standard 15% fixed income tax rate.



For the purposes of VAT, the virtual currency is considered the same currency as fiat currency.

The release of tokens (ICO) is neither supply of goods nor provision of services, therefore, is not subject to VAT.


When tokens treated as securities are supplied for payment through ICO, such tokens are treated as issue of shares which is not subject to VAT.

When the place of supply of tokens treated as virtual currency is Lithuania then such supply is usually VAT exempted.

When tokens treated as coupons are supplied in Lithuania, then the consideration received for such supply will be considered as advance payment which, usually, taking into account the fact that at the time of receipt of an advance payment the tax regime is not clear, will not be subject to VAT.

Other taxes

For the purposes of other taxes, other type of instrument may be recognized as a virtual currency as well.

Tokens designated to founders


Locked tokens received by founders without payment will not be considered as subject to the income tax and will not be charged by the personal income tax until sale of these tokens (e.g. sale, exchange or otherwise transfer of tokens).


The guidelines also give clarity and explanations on how the ICO and virtual currencies should be treated from the accounting point of view.

Further details can be found in the text of guidelines (link below).


Any questions? Please feel free to contact us.

bottom of page