Government rejects adding car repair costs to purchase price

The Lithuanian government opposes proposed amendments that would allow registration, customs, repair and additional parts costs to be included in a vehicle’s purchase price, LRT reported.

The government said customs duties and vehicle registration costs are already treated this way under current legislation, making the proposed provisions excessive and inconsistent with the principle of purposeful lawmaking.

It also said costs related to preparing a vehicle for use, repairing it and purchasing additional parts are, by their economic nature, operating and maintenance expenses rather than acquisition costs. Including them in the purchase price would fundamentally distort the taxation of income from an increase in asset value, the government said.

The government’s conclusion states that the Personal Income Tax Law already contains clear rules for determining the acquisition price of different types of personal-use property. Introducing additional conditions for only one type of movable property, vehicles, would therefore conflict with the principle of systematic lawmaking established in the Law on the Basics of Lawmaking.

Parliament approved the amendments for further consideration in May. The proposal, initiated by MP Karolis Neimantas, would include repair and additional parts costs incurred within six months of purchasing a vehicle in its acquisition price.

Neimantas said the main aim was to reduce illegal businesses, particularly in vehicle repair, by encouraging buyers to use legitimate services that provide documentation for necessary repairs and parts replacements.

If approved, the amendments would also include transport, customs and registration costs, as well as expenses incurred to prepare a vehicle for proper operation.