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LV The SRS will provide support by helping companies affected by the Russian food embargo resolve tax payment issues
In solidarity The State Revenue Service (SRS) will provide priority assessment and refund of overpayments of value added tax (VAT) and corporate income tax (CIT) for Latvian taxpayers – companies that have experienced problems as a result of the Russian food embargo, as well as take other necessary supporting measures within the framework of regulatory enactments, the SRS informs.
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The SRS, in solidarity with Latvian taxpayers affected by the consequences of the economic embargo imposed by Russia, has been actively involved in working on urgent legislative changes aimed at helping entrepreneurs more easily overcome unplanned economic difficulties. The SRS also calls on entrepreneurs who are facing temporary difficulties in paying taxes or a decline in their turnover to contact the SRS in a timely manner and use existing tools that allow them to reduce or extend tax payments.
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In order to provide support to taxpayers affected by the sanctions of the Russian Federation, the SRS will provide special support to those taxpayers whose activities have been affected by the imposed sanctions, and within the framework of regulatory enactments:
- will ensure priority assessment and refund of VAT and CIT overpayments;
- Applications for granting extensions of tax payment deadlines, applications for adjusting the amount of CIT advance payments, and applications for voluntary debt repayment will be reviewed in an expedited manner;
- will take other necessary supporting measures within the framework of regulatory enactments.
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CIT advance payments
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Law About corporate income tax (Law on CIT) Article 23 provides for a special procedure for the payment of CIT advance payments if the company has encountered difficulties due to a decrease in turnover or profit. The SRS, upon a substantiated application by the payer, starting from the month in which the SRS has received the payer's application, may determine a different amount of tax advance payments in the event that the payer's net turnover has significantly decreased compared to the relevant period of the pre-tax period or its further decrease is expected, as well as if the payer has significantly changed the type of activity, structure of income or expenses, or the amount of profit has decreased.
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Additionally Law on CIT Section 23, Part 6, provides for a special procedure for farmers. It provides that entrepreneurs who carry out agricultural activities and earn income for the 90% taxation period from the sale of self-produced agricultural products and agricultural services shall make CIT advance payments voluntarily. So, the aforementioned group may already currently not make CIT advance payments, but pay tax only in a summary manner if there is a profit.
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Extension of tax payment deadline
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The SRS is entitled to grant taxpayers an extension of the tax payment deadline in one form of taxes and other payments to the budget 4 times during a calendar year. To receive an extension of the tax payment deadline, an application must be submitted to the SRS no later than one month after the payment deadline.
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When considering a taxpayer's motivated application, the SRS evaluates the taxpayer's actual financial situation, as well as takes into account the following factors:
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- whether the taxpayer complies with the deadlines for payment of current tax payments set out in the regulatory enactments regulating the specific tax;
- whether the taxpayer has previously been granted an extension of the tax payment deadline, and whether the taxpayer has complied with the deadlines set in the decision on granting an extension of the payment deadline;
- whether the taxpayer complies with the deadlines for submitting tax and information declarations set out in the regulatory enactments regulating the field of taxation;
- whether the taxpayer cooperates with the tax administration;
- whether no violations were detected for the taxpayer during the last tax audit.
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Source: SRS
