Jānis Taukačs Partner janis.taukacs@sorainen.com
	Ūve Zosārs Senior Associate uve.zosars@sorainen.com
	Alisa Šurko Associate alisa.surko@sorainen.com

In this Latvian Tax Newsflash we have listed the most material amendments to the Law on Taxes  and Fees  which  came  into  force on 9 November 2011:

• The definition of a structural unit now also includes websites through which an economic activity is carried out. We presume this generally means that internet shops belonging to Latvian companies should be declared to the tax authorities. The definition also requires that all foreign branches of Latvian companies should now also be declared to the SRS.
• The   number  of  Top  tax  debtors  to  be  published  is limited to 100.
• As of 1 July 2012, the terms of extension of tax payments will be prolonged:
• for current taxes and debts – up to 1 year instead of 3+3 months (up to 4 times a year for each type of tax);
• for tax audit  assessments  – up  to  1.5   years  instead of 1 year;
• for Personal Income Tax arising out of cancellation of a bank loan – up to 5 years.
• The law now extends cases when taxes overpaid can be deleted – also when not claimed within 3 years.
• For taxes incorrectly claimed from the state the law no longer formally requires late payment interest.
• Penalty reduced from 30% of the tax to 20% (if the adjustment is up to 15% of the tax to be declared), and from 50% to 30% (if the adjustment is over 15% of the tax to be declared).
• If the taxpayer cooperates and has committed no other breaches, then the penalty will be reduced by half (thus 10% and 15%).
• For a repeated breach the penalty will be doubled (thus 40% and 60%).
• If a tax return is amended after receiving notification of a tax audit but before the audit takes place, a 5% penalty applies.
• Procedure for settlement with the SRS General Director is also amended.

VAT profiles for Baltic States available

VAT Forum, an international partnership of tax specialists, in cooperation with leading European law firms is to publish a book on the VAT legislation and compliance in European Union Member States. Law firm SORAINEN prepared chapters on VAT in all three Baltic States, to read them please click here.