Latvia introduces changes in legislation to simplify paying taxes and encourage transparency and compliance. The first change to the Law on Taxes and Duties simplifies tax payments on income received by micro-enterprises by creating an Operating Income Account (OIA).
Micro-enterprise taxpayers will no longer be required to calculate and make tax payments into the state single tax account. Instead, tax will be calculated by the State Revenue Service (SRS) based on revenue deposited into the OIA, and the bank will automatically transfer it to the single tax account.
This micro-enterprise tax payment solution is a voluntary option that banks can opt into in collaboration with SRS by registering the OIA directly in the Electronic Declaration System (EDS) for micro-enterprise tax payments. Micro-enterprise taxpayers can use the new service as soon as their bank has registered the account in EDS.
The second change promotes transparency by allowing SRS to publish information on the most grievous violations of tax and customs laws and regulations by legal entities. This change in the Law on Taxes and Duties aims to promote fair competition and voluntary fulfillment of tax and duties obligations.
SRS will now be able to publish information on:
- Tax audit results,
- Compliance check results,
- Decisions specifying tax amounts,
- Decisions establishing customs debts, and
- Refusals of overpaid VAT refunds.
The information will be available on the SRS website and will include:
- name and registration number of the legal entity,
- date the decision takes effect,
- nature of the matter and precise decision, and
- information on any appeals.
The information is made public within seven business days after the decision has become indisputable or has been appealed to a court and business operation has not been suspended. Information on the decision will be available until the decision is revoked, but no longer than three years after its publication.
The Director General, Ieva Jaunzeme, praised this change saying that the public will finally have the right to know what decisions SRS has made.