Latvian Tax Authority publishes its decisions

Since 5 August 2021, the Latvian Tax Authority (TA) has been obliged to publish on its website information about its decisions establishing violations of tax and customs legislation, including decisions on the following topics:

• the results of a tax audit,
• the results of a data compliance check,
• decisions specifying the tax amounts due in accordance with the Law "On Taxes and Duties",
• decisions establishing a customs debt,
• decisions to refuse the refund of overpaid VAT.

The aim of the new regulation regarding publishing of the TA decisions is

1. to ensure the public's right to be informed on violations of tax and customs legislation by legal entities, and
2.  to facilitate fair competition between taxpayers and voluntary fulfilment of tax obligations.

The information on the TA website will include:

• the name and registration number of the legal entity;
• the date when the decision takes effect;
• the essence and decisive part of the decision;
• information on whether the decision has been appealed.

Information on the decision will be available until the decision is revoked and will stay on the TA website for three years after its publication.

The TA does not have an obligation to ask the taxpayer’s consent or to inform the taxpayer before publishing the information on its website. Publishing the information on the TA website is not considered as a breach of confidentiality.

In practice, this new policy means that if a person registered in Latvia for VAT purposes has submitted a VAT return resulting in overpaid VAT, and in the opinion of the TA, this entity has not been able to submit an adequate response, explaining the reasons for the VAT overpayment, then the TA decision to refuse to repay the overpaid VAT amount will be published to the TA website as a decision on violations of tax legislation.

Taking into account the above changes in the Latvian law, to avoid a potentially damaging, unnecessary publication being made by the TA,  it is crucial for entities or foreign companies, having a branch, a permanent establishment, or a VAT registration number in Latvia to provide quick and qualitative responses to any TA information requests within the deadlines specified by the TA. It should be noted, that the deadlines given are usually very short and it is important to meet them or agree with the TA on extension of the deadline.

If you face the necessity to communicate with the Latvian Tax Authority we would be happy to assist and provide our support in preparation of the responses to the enquiries to maximize the chance of avoiding adverse publicity and damage to your reputation.

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

Irēna Lejiņa, Director, Tax, KPMG in Latvia