In Latvia, registration as a taxpayer is done at the State Revenue Service (SRS). The registration is governed by the Law on Value Added Tax listing VAT taxable transactions and their taxable value, as well as by the Cabinet Regulations No. 933 Procedures for the Application of Provisions of the Law on Value Added Tax adopted on 14 November 2006. The processes involved in registering as s taxpayer are:

Submission of Application

The application to be a taxpayer is submitted to the State Revenue Service which requires the provision of a form of identity, such as a driver’s license, a personal identification document, or a relevant authorization.

Decision on Registration 

The SRS decides on the taxpayer’s registration in the Register of VAT Taxable Persons within 10 days after assessing and inspecting the application and completing other processes. The SRS has the authority to gather information on enterprises, inspect manufacturing facilities, and inquire about the company’s main partners, activities, and so on.

Submission of Documents

The documentation required for registration in the Register of VAT Taxable Persons by the SRS can be provided online using a secure e-signature to any SRS customer service center or any regional department of the Register of Enterprises after the company is registered.

Registration Refusal

If an applicant cannot be reached at his or her declared place of residence, did not provide the information requested by SRS, or provided false information about his or her financial capabilities to engage in economic activities, the SRS has the right to refuse registration. The refusal of registration in the Register of VAT Taxable Persons can be appealed within 30 days by sending a written request to the customer service center where the decision was made. An applicant may revise and resubmit his or her registration application to the SRS.

Submission of Declarations

A VAT taxpayer must submit VAT declarations from the moment of registration. Declarations must be provided once every quarter after registration. Taxpayers set the taxation period for the following year after the calendar year. VAT declarations must be submitted every six months by those whose taxable income in the preceding year was less than €14,300. Those with taxable income between €14,300 and €50,000, on the other hand, must file a quarterly declaration, and those with taxable income of more than LVL 35,000 in the previous year become monthly payers.

Taxpayer Status

From the date on which the decision is taken, a taxpayer becomes a VAT taxpayer. The VAT is levied on all transactions made by this individual as of that day, and the ability to deduct the input tax is obtained as of that date. The taxpayer is notified of the decision by either receiving a formal decision in the mail or by having the fact of registration published on the SRS website: If a person receives the notification of a decision by mail, registration is considered complete seven days after the decision is delivered to the post office, whereas, a person is considered to be registered in the Register of VAT Taxable Persons the next day after the publication of such decision if the information is published on the SRS’s webpage. The SRS’s website also includes information on counterparties, making it possible to determine whether or not they are VAT taxable.

Changing Taxpayer status

If a person’s taxable income exceeds LVL50,000 in the previous 12 months, they must register. If a taxpayer has purchased goods within the European Union exceeding the registration threshold of €10,000 at least once but does not intend to purchase other goods in the European Union in the next calendar year, the total value of which could exceed €10,000, the taxpayer has the right not to register in the Register of VAT Taxpayers.

Rates of VAT

Since January 1, 2011, the basic VAT rate on goods and services has been 22 percent of the total transaction value, up from 21 percent previously. The decreased rate is set at 12 percent. The Law on Value Added Tax lists the items and services that are subject to the reduced rate. If your taxable income is less than LVL 35,000, you can register for free. This rule has the advantage of allowing the VAT paid to be deducted as input tax when acquiring goods and services. 

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