Latvia: Information about results of tax audits, taxpayer compliance publicly available

Information about tax authority's decisions regarding violations of tax and customs laws

Information about tax authority's decisions regarding violations of tax and customs laws

The tax authority since August 2021 has been required to publish, on its website, information about its decisions regarding violations of tax and customs laws. The information is available for a period of three years or until the tax authority’s decision is revoked.

Among the items or topics that are published are the following:

  • The results of a tax audit
  • The results of a data compliance check
  • Tax authority decisions specifying the tax amounts due
  • Decisions establishing a customs debt
  • Decisions to deny a claim for refund of overpaid valued added tax (VAT)

The information publicly available on the tax authority’s website includes:

  • The name and registration number of the legal entity (taxpayer)
  • The date when the tax authority’s decision is effective
  • A summary and description of the tax authority’s decision
  • Information about whether the decision has been appealed

There is no obligation to ask for the taxpayer’s consent or to inform the taxpayer before the information is published by the tax authority. Publishing the information is not considered as a breach of confidentiality.

KPMG observation

In practice, this publication policy means that, for example, if a taxpayer registered in Latvia for VAT purposes has submitted a VAT return resulting in overpaid VAT, and in the opinion of the tax authority, this entity has not submitted an adequate response explaining the reasons for the VAT overpayment, then the tax authority’s decision to refuse to refund the overpaid VAT amount will be published on the tax authority’s website as a decision under the violations of tax legislation.

To avoid potentially damaging and unnecessary public disclosures, entities or foreign companies with a branch or permanent establishment in Latvia or having a VAT registration number in Latvia need to consider providing quick and qualitative responses to any information requests within the deadlines specified by the tax authority. The deadlines that are typically given are very short.

Thus, taxpayers need to consider how to meet the deadline, or to enter an agreement with the tax authority on an extension of the deadline, to avoid adverse publicity and reputational damage.

Read an April 2022 report prepared by the KPMG member firm in Latvia

 

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