To support businesses during the coronavirus outbreak Latvia has introduced new VAT measures to speed up the procedure for refunding overpaid VAT.
According to the new VAT repayment procedure:
- The State Revenue Service (SRS) refunds overpaid VAT within 30 days of receiving the VAT return for the respective tax period.
- Before a refund, the SRS can transfer overpaid VAT to cover other tax debts to the State budget and repay only the difference (remaining amount), if any.
[Contrast the standard procedure set by Latvian law, where the SRS refunds within 30 days but only if certain criteria are met, e.g., if supplies subject to 0% VAT exceed 90%, or overpaid VAT exceeds EUR 5,000. If the criteria are not met, overpaid VAT is carried forward to later tax periods and accrued overpaid VAT is refunded at the end of the tax year.]
In addition, under the new procedure:
- overpaid VAT incurred by 31 March 2020 and carried forward to later tax periods will be refunded by 14 April 2020,
- overpaid VAT incurred before 31 March 2020 and which was held up by the SRS due to additional administrative measures will be repaid no later than on the next working day after receipt of the required information from the taxpayer,
- VAT overpaid by taxable persons excluded from the Latvian VAT register will be repaid within 30 days of a decision on VAT deregistration. Unlike the standard refund procedure, there is no need to file a separate application for a VAT refund.
The new procedure applies from 1 April to 31 December 2020.