Paying for advertising with a company card does not change its tax treatment in Lithuania. The deduction depends on what the spend is (advertising or representation), on the document behind it and on how the VAT is handled. A card payment is only the way the money left your account. Advertising is a deductible business cost when it is documented properly. Representation is limited to 50% of its cost and 2% of income. Card statements support the payment, but they do not replace the invoice.

This guide is for finance leaders, founders and accountants at Lithuanian companies who pay for ads by card, whether on Google, Meta, local media or print. It covers the corporate income tax (CIT) split, VAT on foreign ad platforms, the documents to keep and a monthly reconciliation routine.

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TL;DR

Advertising promotes your company, name or products to existing or potential buyers. Under the CIT rules it is a deductible business expense when supported by proper documents.
Representation builds relations with specific persons, such as client meals and souvenirs. Only 50% of it is deductible, capped at 2% of the period’s income.
Input VAT on advertising can generally be deducted. For representation, only 50% of input VAT can be deducted.
Foreign ad platforms such as Google or Meta usually invoice without Lithuanian VAT. The reverse-charge rule means your company accounts for the VAT itself.
Keep three things together for every card payment: the card statement line, the invoice or receipt, and a short note of what the spend was for.

Why the card does not change the tax rule
Advertising or representation: the distinction that decides the deduction
Typical card-paid advertising costs and how to classify them
Documents that support the deduction
VAT on advertising paid by card
A monthly reconciliation routine
Our perspective
Opening a business account for advertising spend
FAQ
Sources

Why the card does not change the tax rule

Lithuania’s Ministry of Finance lists advertising and representation costs among the items with limited allowable deductions for corporate income tax. The detailed rules sit in Article 22 of the Law on Corporate Income Tax (Pelno mokesčio įstatymas), as set out in the VMI commentary on the law. Non-deductible expenses are covered in Article 31.

According to ACS.lt, an expense passes three tests before you can deduct it:

It relates to your business activity.
It was actually incurred and is documented with legally valid documents that contain the mandatory financial accounting information.
No prohibition or limit applies to it.

The payment method appears nowhere in these tests. A card payment, a bank transfer and a direct debit are treated alike. What matters is the document and the purpose. This is why a clear card process helps: it gives you a payment record and makes it easier to find the matching document.

Advertising or representation: the distinction that decides the deduction

The State Tax Inspectorate (VMI) draws the line by purpose. In its guidance on recognizing advertising and representation costs, advertising aims to promote the company, its name or its products to existing or potential buyers. Representation aims to establish or improve business relations with specific persons and to present the company, its services or goods.

Feature	Advertising	Representation
Audience	Existing and potential buyers in general	Specific persons, such as partners or clients
Typical examples	Online ads, outdoor ads, flyers, sponsored listings	Catering, travel, souvenirs, joint culture or sports events
CIT treatment	Limited-amount allowable deduction, supported by documents	50% of cost deductible, capped at 2% of income
Input VAT	Deductible without restriction (except mixed-activity limits)	50% deductible

The card line on your statement looks the same in both cases, for example a merchant name and an amount. That is why the classification has to be made from the invoice and the business purpose, not from the statement.

How the 50% and 2% limits work

VMI’s representation guidance says deductible representation is 50% of total representation costs. That deductible amount cannot exceed 2% of the company’s income for the tax period. The remaining 50% is treated as non-deductible. PwC’s Lithuania summary states the same limit.

A simple example: your company’s income for the year is €500,000, so the cap is €10,000. If representation costs total €30,000, half is €15,000, but only €10,000 can be deducted. If costs total €12,000, half is €6,000 and the whole amount is deductible, because it is under the cap.

What counts as representation

Per VMI’s 2023 guidance, representation includes travel, accommodation and catering, representative items such as souvenirs and books for specific persons, and culture or sports events attended by employees together with business partners. Apartments, cars and luxury items are excluded. ACS.lt adds that, per VMI explanations, gift vouchers and food gift sets fall here, as do alcoholic beverages from 1 June 2024.

Two boundaries cause most mistakes:

Internal events. VMI says representation does not cover funds for relations with your own employees, shareholders, owners or controlled entities. An event organized exclusively for them is not representation. ACS.lt notes that when employees attend a mixed event whose purpose is client relations, their share is also representation.
Branded items. A conference hall rented for an organized event can be representation when the official part meets the definition of representation. Fidexperta also notes that items bearing your symbol, name or trademark can be considered representative. Whether branded items are advertising or representation depends on whether they go to the general audience or to specific persons.

Typical card-paid advertising costs and how to classify them

Card payment	Usual classification	What to keep
Google Ads or Meta Ads top-up or monthly charge	Advertising	Platform invoice, statement line, campaign reference
Local media or online portal ad	Advertising	Supplier invoice, ad order or confirmation
Flyers, brochures, posters	Advertising	Printer invoice, proof of distribution purpose
Dinner with a client	Representation	Receipt or invoice, note of who attended and why
Branded gift for a named partner	Representation	Invoice, short note naming the recipient
Team celebration	Not representation	Treat as an employee matter, discuss with your accountant

The classification is your accountant’s call, and the grey areas are real. When a purchase has both promotional and relationship-building elements, split it in the books and record the logic.

Documents that support the deduction

VMI’s guidance says advertising costs must be supported by documents with the mandatory information required by the Financial Accounting Law. For the company’s own products or services, a free-form document is enough. For goods or services bought from other entities, you need legally established purchase documents. No additional act is needed when the invoice clearly shows the transaction. Cash prizes need bank documents when they are transferred from the company’s bank account to the winner’s account.

Representation works differently. VMI’s guidance states that it is substantiated by a free-form act showing the period or date, the content and the amount. Since 1 May 2022, the signatures of the head and chief accountant are no longer required on such acts.

Some practical points for card payments:

A card slip is not an invoice. A statement line shows that you paid. It does not show what you bought, from whom, or with what VAT. Request the invoice or a compliant receipt every time.
Receipt plus invoice. Agroakademija summarizes the rule that when the seller issues an invoice and also attaches a receipt, the expense is recognized on the invoice.
The purpose is yours to prove. Baltic Capital Partners states that the company and its director carry the burden of showing business purpose and necessity. A one-line note in your accounting system (campaign, audience, period) does most of that work.

VAT on advertising paid by card

Domestic suppliers

VMI’s document RTD-78 states that when a VAT payer uses purchased goods or services for advertising, this is tied to its economic activity. Input VAT can then be deducted without restrictions, except for mixed-activity limitations. For representation purchases, 50% of input VAT can be deducted. The FR0600 filling instructions confirm that this non-deductible half stays out of the deductible VAT field (field 35).

RTD-78 also covers promotional materials. Informational advertising materials such as flyers, brochures and posters, distributed free of charge to buyers for advertising purposes, are not a gift. No output VAT arises and the representation VAT limits do not apply. Other advertising goods given away may trigger output VAT above the small-gift threshold, so check the current threshold with your accountant before a large giveaway.

Foreign platforms such as Google and Meta

Most card-paid advertising goes to foreign platforms. The Baltic Incorp guide explains that for advertising purchased from foreign entities, for example invoices from Ireland, reverse charge applies. Your company accounts for the VAT in Lithuania even when the invoice shows none. The same guide notes that companies under the Small Business Scheme (SVS) cannot deduct this VAT as input VAT, and that a small monthly ad budget can trigger a VAT registration requirement. If your ad spend is significant, discuss registration with your accountant.

This is also where a card helps in practice. Ad platforms charge by card on a rolling basis, and the receipts arrive separately from the invoices. The financial verification step that platforms require from advertisers also leaves a paper trail. You can read about Google Ads financial verification and what to prepare before the first payment, then store the resulting invoices with your card records.

A monthly reconciliation routine

The research behind this article found no official checklist for matching card statements to ad invoices, so here is a routine that follows the document rules above. Adapt it to your accounting system.

Export the card statement for the month, one file per card or sub-account.
Tag each advertising line with the platform or supplier and the campaign or purpose.
Match each line to an invoice. Download platform invoices after the billing period closes. Chase any payment without one.
Classify each item as advertising, representation or neither, and record why.
Handle VAT. Book reverse charge for foreign suppliers, split representation VAT 50/50, and keep advertising VAT fully deductible if you are a VAT payer.
Check amounts. Differences between the statement and the invoice usually come from currency conversion, fees or prepayment top-ups. Book them explicitly.
Archive the invoice, statement line and note together.

Companies with several people spending on ads gain a lot from separating cards by function. Our guides on card expense management and company card policy show how to set limits and assign owners so each line has someone who can explain it.

Our perspective

Most advertising tax problems start at the point of payment, not at the point of filing. A marketer buys ads with whichever card is nearby, the invoice lands in a personal inbox, and the accountant gets a statement line with no context. The rule is not complicated, but the evidence is scattered.

We built Demivolt’s business accounts and card programmes around the idea that spend should be structured before it happens. Dedicated cards for advertising platforms keep campaign payments in one place. Role-based user management lets finance decide who can spend and who can only view. Multiple accounts let you separate a marketing budget from operating funds.

Our fee schedule is simple to plan with. Account opening, account verification, a dedicated client manager, monthly maintenance and account closure are all €0. Outgoing SEPA transfers cost €0.40 each, and incoming SEPA transfers are free. This lets finance leaders estimate payment costs without surprises. As a regulated EU platform, we keep client funds in segregated accounts and onboard businesses through a risk-based process.

A structured card setup does not replace your accountant’s judgment on classification. It gives your accountant clean inputs to work with.

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Opening a business account for advertising spend

If your company pays for ads from several people’s cards or from an account that mixes everything, a dedicated setup makes the monthly routine shorter. Demivolt offers business accounts with dedicated IBANs and card programmes with virtual and physical Visa business cards. We also run an industry offer for media and advertising businesses.

To see how your spend would be structured, get started with Demivolt or contact us. Our team will explain account opening and card options for your company.

FAQ

Can I deduct advertising paid with a business card?

Yes, if it meets the general conditions: it relates to your business, it is documented with a valid invoice or other document containing the mandatory accounting information, and no limit applies. The card is only the payment method. Representation is the exception, because it is capped at 50% of the cost and 2% of income.

Is a Google Ads or Meta card receipt enough for the books?

Usually not on its own. You need the platform’s invoice, which shows the supplier, the service and the period. Because the supplier is foreign, reverse-charge VAT applies, so your accountant needs the invoice to book it. Keep the card statement line alongside it.

Is a client dinner paid by card advertising?

No. It is representation, because it targets specific persons to build business relations. Only 50% of the cost is deductible, within the 2% of income cap, and only 50% of the input VAT can be deducted. Record the date, content, amount and the purpose of the meeting.

Are flyers and brochures handed out to customers a gift?

VMI’s guidance says informational advertising materials given free to buyers for advertising purposes are not gifts and trigger no output VAT. Other promotional goods can be treated as gifts above the small-gift threshold, so confirm the current rule with your accountant.

Advertising Expenses Paid by Business Card in Lithuania