This type of activity appears to be the easiest way to engage in economic activities. However, registration of a business license is subjected to a condition that a specific type of activity, e.g. peddling trade is included into the list of activities authorised to be performed under a business certificate. The list of such types of activities was approved by the Resolution No. 1797 of 19 November 2002 of the Government of the Republic of Lithuania On the Rules for the issue of business licences to residents. This legal act is rather significant by establishing the rules governing the activities of a person holding a business licence. Another legal act important in this relation is Resolution No. 1976 of 17 December 2002 of the Government of the Republic of Lithuania On the procedure of accounting of residents operating under a business licence. Equally account should be taken of the provisions of the Order No. 379 of 31 December 2002 of the Head of the State Tax Inspectorate under the Ministry of Finance On the approval of the form of receipts of the purchase-sale of goods (services) and the procedure for the issue such receipts (Official Gazette, 2003, No. 2-67), and the Order No. VA-16 of 8 March 2007 of the Head of the State Tax Inspectorate under the Ministry of Finance On the filling in of receipts of the purchase-sale of goods (Official Gazette, 2003, No. 31-1151).
Residents operating under a business licence shall be registered as VAT payers where the amount of the consideration received or receivable for the goods sold and/or services rendered in the course of the year (within the last 12 months) exceeds the amount of EUR 45,000.
The principal difference between the individual activity under a business license and under a certificate lies in the requirement, in relation to registration of a business certificate, to pay the income tax of residents in advance. Persons operating under certificates are not aware of the exact amount of the income tax of residents this being directly dependant upon the amount of the income earned. This type of activity is more appropriate to those who incur significant costs in relation to their activities since those are deductible from the income thus reducing the amount of the personal income tax payable. Another important characteristics of economic activities under a certificate is that the person may engage in any commercial activities since it is not limited by any list of authorised activities. The same person operating under a certificate may simultaneously engage in types of activities that may be performed under a business license. This type of economic activities is governed by more legal acts that the activities under a business license. The principal legal act governing economic activities under a certificate is the Law on Income Tax of Individuals.
Individual enterprises have lately become specifically unpopular in view of the significant tax burden provided by the relevant legal provisions. Nevertheless, despite the heavy taxation individual enterprises do have some organisational advantages if compared to public and private companies. Firstly, the accounting of individual enterprises is significantly simplified. Therefore the accounting of such companies may be conducted without referring to the services of professional accountants. Such enterprises may consist of its owner only, or the owner may also hire other employees.
Taxes payable by individual enterprises: personal income tax (15 percent), corporate income tax (15 or 5 percent), mandatory health insurance tax (9 percent), and State social insurance contributions (28.5 percent). Where the turnover of the enterprise exceeds the amount of EUR 45,000, the enterprise is to be registered the VAT payer (at the rate of 21 percent).