Single tax account

 Published: 19.03.2021. 12.52


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To reduce the administrative load, a new account for state budget payments administered
by the SRS will be introduced
from 1 January 2021 – a single tax account that will replace the current tax accounts.

Customs duties shall be paid on the single account starting from 2023. Until that time, the current procedure is retained.

To ensure that all declarations are submitted prior to tax payment due dates, new deadlines have been set for the submission of several declarations – electricity tax, lottery and gambling tax and employer reports.

To provide an opportunity to pay all taxes via a single bank payment order, as of 1 January 2021, deadlines for regular tax payments will be set for the 23rd  day of the respective month.

The cash amount deposited in the single account will be distributed to cover the taxpayer’s liabilities by tax type using the FIFO principle.

Simultaneously with the single account, the accrual principle will be introduced for accounting of SRS administered state revenue, making tax bookkeeping equal for both the State and taxpayers.


Beneficiary: State budget (State Revenue Service)

Registration No of Beneficiary: 90000010008    

IBAN–Account of Beneficiary: LV33TREL1060000300000

Beneficiary Institution: The Treasury of the Republic of Latvia

BIC/SWIFT: TRELLV22XXX

  • What taxes are payable to the single tax account?
    • Taxes and duties payable to the single tax account are stipulated by the Law on Taxes and Duties, Section 231 Paragraph five:

      “The taxpayer shall pay to the single tax account the following taxes, duties, other payments specified by the State and related payments (late payment charges and penalties) administered by the State Revenue Service:

      1) personal income tax:

      2) corporate income tax;

      3) value added tax;

      4) excise duty;

      5) natural resources tax;

      6) lottery and gambling tax;

      7) mandatory state social insurance contributions;

      8) electricity tax;

      9) micro-enterprise tax;

      10) subsidised electricity tax;

      11) state duty for business risk;

      12) state duty for the rights to use the numbering (ENUM);

      13) licence fees;

      14) payments for the use of state capital;

      15) payments in accordance with claims made by the tax administrations of the Member States of the European Union and other countries for the collection of tax debts;

      Customs duties shall be paid on the single account starting from 2023. Until that time, the current procedure is retained.

  • Tax declaration and payment procedure as of 1 january 2021
    • Due dates for declarations and payments will change for a number of tax documents, and some individual terms for MSSIC payments announced by the SRS will become invalid.

      For all declarations due by the 20th day of the month, the current deadline will remain unchanged, e.g. declarations on value added tax, corporate income tax, excise duty and natural resources tax. Whereas, to ensure that a tax is declared prior to its payment due date, the following changes will be introduced as of 1 January 2021:

      • employer reports should be submitted by the 17th day of each month;
      • electricity tax declarations should be submitted by the 20th day of each month;
      • reports on the assessed auction and gambling tax should be submitted by the 15th day of each month.

      There will be a single payment deadline for all regular internal taxes administered by the SRS on the 23rd day of each month. By setting a single deadline by which taxes are payable, the amounts of several taxes can be combined into a single payment in order to be credited to the single tax account via one bank transfer.

      The single due date will not pertain to payment deadlines provided in decisions taken as a result of tax control measures. The current procedure will be retained for irregular payments and payments set by other documents (e.g. SRS decisions).


      TAX DECLARATION AND PAYMENT PROCEDURE AS OF 2021

      Amendments of 23 May 2019 to the Energy Law

      Amendments of 16 July 2019 to Cabinet Regulation No. 40 of 15 January 2013 “Regulations on Value Added Tax Declarations

      Amendments of 10 December 2019 to Cabinet Regulation No. 785 of 16 December 2014 “Procedure by which personal income tax, tax-related late payments and penalties are transferred to the budget

      Amendments to Cabinet Regulation No. 67 of 4 February 2020 “Regulations on Lottery and Gambling Tax Reporting Forms and Procedures for Their Completion

      Amendments of 16 June 2020 to Cabinet Regulation No. 827 of 7 September 2010 “Regulations Regarding Registration of Persons Making Mandatory State Social Insurance Contributions and Reports Regarding Mandatory State Social Insurance Contributions and Personal Income Tax”.

  • How the FIFO queue principle operates
    • The FIFO queue operation principle is first in – first out.

      An amount paid to the single tax account will be distributed automatically by tax type according to the principle that the oldest obligation or principal amount of tax is covered first, followed by late payment charges, if any, and finally penalties, if any apply.

      Both regular payments and debts will be covered according to the FIFO principle, thus, the taxpayer cannot have a tax debt and overpayment in another tax at the same time. The SRS draws attention to changes in the procedure for the use of the declared overpayment. As of 2021, debts will only be covered on the date of approval of the declared overpayment by the SRS, not the date of submission of the declaration.

      The detailed procedure for the automatic distribution of the payment is laid down in Cabinet Regulation No. 661 of 30 October 2018 “Procedures for the Payment of Taxes, Fees, Other Payments and Related Payments Set by the State and Their Transfer to the Coverage of Obligations”.
      FIFO QUEUE OPERATION PRINCIPLE

  • How to find out what taxes have been paid
    • To ensure the taxpayer’s awareness of which taxes are covered from the amount remitted to the single tax account, this information will be available in the SRS EDS system.

      The technical solution provides that the taxpayer in EDS and the SRS employee in MAIS will see the same information, thus making mutual communication more convenient.

      EDS section payments and state of instalments usage



      About rights to use the EDS section payments and state of instalments

  • How the accrual principle operates
    • As of 1 January 2021, the accrual principle will be introduced in the accounting of State revenue administered by the SRS.

      The accrual principle means that accounting transactions and other events are recognised when they occur (not when money is received or paid to the Treasury).

      With the introduction of the accrual principle, the taxpayer will have the opportunity to obtain correct and comprehensible information on the status of tax payments for each specific historical date selected, which will ensure that state budget revenues administered by the SRS are accounted for in accordance with generally accepted accounting principles. This will make the tax payment process transparent, visible and traceable. It will be possible to see both the calculated liabilities and payments made for each tax.

      Amendments of 23 November 2017 to Section 29 Paragraph two of the law “On Budget and Financial Management

  • Useful informative materials
  • Frequently asked questions and answers
    • Frequently asked questions and answers about the single tax account

      Declaration

      Which declaration submission deadline will change in connection with the introduction of the single tax account?
      In 2021, with the introduction of the single tax account, the declaration submission deadline will only change for regular domestic tax declarations, which currently have to be submitted after the 20th date of the month.
      In 2021 the Electricity tax declaration submission deadline will change from the 25th to the 20th date of the month. In turn, starting from 2021, the employer’s statement and self-employed person’s statement (for performers of economic activities, recipients of royalties, domestic employees with an employer — foreigner – and foreign employees with an employer — foreigner –, who pay taxes themselves) should be submitted by the same deadline – by the 17th date of the month. Individually notified employer’s statement submission dates are no longer valid in 2021.
      There has been a change in the reporting period for lottery and gambling tax declarations– this must be submitted once a month.


      Payments procedures

      From 2021 will it be possible to pay absolutely all taxes into the single tax account?
      From 1 January 2021 the majority of all domestic taxes administered by the State Revenue Service (SRS) can be paid into the single tax account. The exception is customs duties, which can only be paid into the single tax account from 2023.
      The payment procedure will not change for immovable property tax - just as until now, this tax must be paid into municipality budget accounts - and light vehicle usage tax payments, which henceforth can also be paid to the Treasury, when conducting transactions at the Road Traffic Safety Directorate. 

      When will it be possible to pay customs taxes into the single tax account?
      Customs taxes can be paid into the single tax account starting from 2023.

      Will it be possible to pay risk duty into the single tax account?
      Yes. In 2021 both risk duty and stamp duty for numeration usage rights should be paid into the single tax account. From 1 January 2021 all taxes, including risk duty, can be made in a single payment, preparing only one payment order. The information specified in the payment order target field does not affect the division of money, because the sum received in processed by the SRS information system, which automatically divides it and directs it to pay the corresponding tax or duty. Information about which of the liabilities notified by the SRS have been covered can be viewed in the Electronic Declaration System (EDS) section "Payments and state of instalments".
      At the same time, one should not that the final deadline for payment into the single tax account is the same for all payments, i.e. the 23rd date of the month. However, one can also make several payments if it is more convenient to organise one’s cash flow this way. It is important that the total sum of calculated taxes should be paid by the 23rd date of the month so that debt liabilities do not accrue.

      In 2021 will it be possible to make payments for the use of light vehicles into the single tax account?
      In 2021 light vehicle usage tax payments can be made as until now - at the Road Traffic Safety Directorate. There are no changes to the current procedure.  These doe not have to be paid into the single tax account. Henceforth, in conducting transactions at the Road Traffic Safety Directorate, light vehicle usage tax payments can also be paid to the Treasury.  

      Will it be possible to pay immovable property tax into the single tax account?
      There will be no changes to the procedure for paying immovable property tax in 2021. Just as until now, the tax must be paid into municipality budget accounts. Immovable property tax should not be paid into the single tax account.

      On which date should payments be made to the single tax account?
      Starting from 1 January 2021, a single payment deadline has been stipulated for all payments into the single tax account – the 23rd date of the month. However, one can also make several payments by the 23rd date of the month if it is more convenient to organise one’s cash flow this way. If the final deadline – the 23rd date of the month – coincides with a public holiday, it will be switched to the next business day as is the case in any similar situation.

      Is it possible to pay a sum into the single tax account that exceeds the calculated and declared tax sum?
      Yes. You can pay a bigger sum into the single tax account than that calculated and notified to the SRS. Unless there is a debt, the overpaid sum will await the next tax payment deadline and will automatically cover the new liabilities. In this case the overpaid sum of money can be recovered according to the current procedure, i.e. by submitting an application to the SRS in the EDS section "Correspondence with the SRS" for reimbursement of the overpayment.
      If you have debts, the overpaid sum will automatically cover these liabilities, starting from those that are longest standing. If the sum applies to any of the tax liabilities for which the payment deadline has already become due, then it cannot be recovered any longer.

      How will money paid into the single tax account be divided up if it is less than the payment sum?
      From the total sum deposited, firstly the oldest principal amount of liabilities will be covered, followed by the late payment charge for these liabilities and finally - the penalty for these liabilities if such have been calculated. After that, the next principal amount of liabilities, late payment charge and penalty in be covered in that order.

      What should I do if I have paid a tax into the single tax account that should have been paid into another account?
      Starting from 1 January 2021, payments can no longer be made into old (those in use until December 2020)) State budget domestic tax accounts. To simplify tax payments for those who do make payments to one of the existing (in use until December 2020) accounts, until the end of 2021 payments made into old accounts will be automatically directed to the single tax account and processed in accordance with the new procedure.
      If a tax is deposited into the single tax account, which in accordance with the new procedure does not have to be paid into the single tax account but into another account (e.g. immovable property tax), then - just as until now - an application should be made in writing to the SRS to recover this deposited sum. However, if the taxpayer has a debt, then this will be automatically paid from the monies deposited into the single tax account and this money used to settle a debt can no longer be recovered.

      When will the single tax account number be active?
      The single tax account will not be active until 1 January 2021. This means that payments can only be made into this account starting from 1 January 2021. In 2020 this number is informative in nature and is publicised so that, if necessary, businesses can make corrections to their company accounting systems.
      Single tax account
      LV33TREL1060000300000
      Recipient: STATE BUDGET (SRS)
      Registration No. 90000010008


      What do I need to specify in the payment objective when making a payment into the single tax account?
      When a payment is made into the single tax account, the information indicated in the payment order objective field has no impact on the procedure for the division of monies, unless it is payment with a special identification code specified for this payment purpose. Only a absolutely precisely specified identification code will be linked to these specific liabilities.
      The SRS information and administration system automatically divides the sum paid into the single tax account in accordance with the procedure stipulated in Cabinet Regulation No.661. The deposited sum of money covers tax payments in accordance with the FIFO principle (first in - first out). First, the longest standing principal amount of liabilities is covered, followed by the respective late payment charge, then any penalty that has been calculated, and then - the next longest overdue liabilities. The information specified in the target field has no impact on the procedure for this division of monies. 
      Pleas note that from 2021, in the payment order it is only compulsory to specify those identification codes that have not been provided in relation to a willing tax payment schedule or tax payment deadline extension. It is compulsory to specify the identification code, for example, when making a payment to receive excise duty stamps etc. In turn, identification codes, which have been awarded in accordance with an agreement regarding a willing tax payment schedule or tax payment deadline extension, are no longer valid in 2021, and starting from 1 January, it is not necessary to specify these identification codes in the payment order.

      In 2021 how should payments be made for a third party, e.g. my daughter’s company?
      Introducing the single tax account and making payments for a third party, it is compulsory to specify this information in the bank payment order’s additional field "End payer". In this field, you should specify the taxpayer’s denomination and registration number or personal identity code number. If this field has not been filled in, the payment will be linked to the person making the payment.
      Please note that if the end payer’s field is not filled in and the payment is directed towards settlement of the payer’s own tax debts, this payment can no longer be recovered or redirected and it will be necessary to make another payment.

      To which account should I transfer EUR 130, which taxi operators pay when receiving a license to carry passengers? 
      Taxi payments should be made into a deposit account. Deposit account number - LV17TREL813105600300B (Compulsory payment for a light taxi which carries passengers).



      Division of monies

      According to what principle will monies paid into the single tax account be divided and directed towards payment of individual taxes?
      From 1 January 2021 sums paid into the single tax account for tax types will be divided automatically. Payments made will be divided according to the FIFO principle - the longest standing liabilities will be settled first from the sum of money paid. In order to determine the longest standing liabilities, the declaration deadline stipulated in laws and regulations will be assessed first of all. If the declaration deadlines match, then the payment deadline will be assessed. If the payment terms also match, then an assessment will be made as to whether the calculation has been formed based on a submitted declaration or stipulated in an SRS decision, and declared liabilities shall be covered first. If these positions also coincide, then an assessment shall be made in accordance with the list of priorities stipulated in Cabinet Regulation No.661.
      If an identification code has been specified for the payment and it is precisely indicated in the bank payment order field, the payment will be linked to the corresponding liabilities for which the payment with the identification code has been made.
      Please note that from 1 January 2021 payments for deadline extensions will no longer be made with an identification code - it is not necessary to specify an identification code in the payment order. Starting from 1 January 2021, these payments will be covered in accordance with the procedures stipulated in Cabinet Regulation No.661 and in accordance with the payment schedule stipulated in the SRS decision - the specified sum shall be covered by the deadlines specified in the decision.
       

      How can I find out as to which tax was paid from the amount transferred to the single tax account?

      The taxes and duties, which have been paid from the amount of funds transferred to the single tax account, can be seen in the EDS section “Payments and payment status” (“Maksājumi un nomaksas stāvoklis”). Information in the EDS section “Payments and payment status” (“Maksājumi un nomaksas stāvoklis”) is updated once the SRS receives a confirmation from the State Treasury as the result of information exchange, i.e., once the payment is actually transferred into the State budget.
      The EDS section “Payments and payment status” (“Maksājumi un nomaksas stāvoklis”) shows both the overpaid tax and tax debts, as well as estimated future payments, for which due dates are to set in within the upcoming month.

      The Electronic Declaration System (EDS) section “Payments and payment status” (“Maksājumi un nomaksas stāvoklis”) consists of several subsections, which ensure an opportunity to follow payments made into the State budget or refunds made to the taxpayer. The information specified in the EDS section “Payments and payment status” (“Maksājumi un nomaksas stāvoklis”) is updated, once the information system receives data regarding a new obligation or the SRS receives information from the State Treasury regarding the amount of funds incoming to the budget and distributes it by taxes.

      • The submenu “Payments” (“Maksājumi”) of the section includes single information on the tax debt, overpaid tax, payments to be made during the upcoming month, and the non-distributed amount in the single tax account. In this section, you can also make a payment to the single tax account, inter alia, for some other person.
         

      The field “Tax debt” (“Nodokļu parāds”) shows the amount to be paid to extinguish all tax obligations.

      The field “Overpaid tax” (“Pārmaksa”) shows the amount formed by all overpaid taxes, which have formed by 2021, as well as the overpaid amounts (for example, VAT) approved by the SRS in 2021, which have not yet been refunded.

      The field “Estimated future payments” (“Aprēķinātie nākotnes maksājumi”) shows the total sum of payments, for which due dates are to set in during the upcoming month.

      If the amount exceeding the amount necessary to extinguish all obligations is transferred to the single tax account, the field “Unallocated contributions” (“Neattiecinātās iemaksas”) shows the sum of excess, from which the future payment will be covered, once its due date sets in. This field shows also the amounts of contributions, which are not related to any particular obligations/calculations, if the due date has not set in for any of these obligations.

      There is a small letter “i” located next to the names of the fields; by clicking this letter, you can find out additional explanatory information and additional information of a particular submenu for system users.

      The field “Unallocated contributions” (“Neattiecinātās iemaksas”) shows the amount of contributions to the single tax account, which is not related to any particular obligations/calculations, as their due dates have not yet set in. In certain cases, the funds are not allocated, as the obligation to be covered has already been covered from the approved overpaid amount under the VAT declaration.

      • The submenu “Taxes” (“Nodokļi”) of the section includes single information by types of taxes. Debt is indicated with a minus sign.
         

      The total amount of each tax is indicated also in detail by components: principal amount, late payment charge and penalty. Currently, the type of taxes “all others” (“visi pārējie”) includes, as the total amount, information on the State duty for risk, numeration duty and payments for the use of the State capital.

      • The submenu “Obligations” (“Saistības”) of the section indicates information on the payment condition of the submitted declaraton/report.
         

      Obligations, for which the due date has already set in (column “Debt(-) Overpayment(+)” (“Parāds(-) Pārmaksa(+)”) or will set in during the upcoming month (column “Estimated future payments, obligations” (“Aprēķinātie nākotnes maksājumi saistības”) are structured according to the FIFO principle, i.e., the oldest is specified first, indicating the procedures for payment / use of overpaid tax. Outstanding obligations are specified at the top of the list, whereas covered obligations are reflected under outstanding obligations and are structured in the descending order by the submission deadline or the date of adjustment.

      • The submenu “History of payments” (“Maksājumu vēsture”) of the section shows the payments made.
         

      The report “SRS data” (“VID data”) allows viewing in detail all the payments made to the single tax account, which were made via the EDS, the bank or the Internet Banking system, as well as all the refunds made by the SRS. Here, all the payment data at the disposal of the SRS starting from 1 January 2021 are indicated.

      The report “EDS payment module” (“EDS maksājumu modulis”) reflects only the payments made via the EDS interface to gain assurance that the payment has been made successfully.

      • The submenu “Payment status” (“Nomaksas stāvoklis”) of the section includes two reports:

      - The “Overview of transactions (from 01.01.2021)” (“Transakciju pārskats (No 01.01.2021)”) contains all data on the accounting of taxes, estimated amounts, late payment charges, penalties, starting from 1 January 2021, specifying also the allocation of made payments under the declaration or other calculation. Transactions are structured in the descending order starting from the latest transaction;

      - The “Budget payment status” (“Budžeta nomaksas stāvoklis”) shows the balance of payment as of a particular date.

      The reports of this submenu are available also in the EDS section “Reports” (“Pārskati”).

      The section “Payment and payment status” (“Maksājumi un nomaksas stāvoklis”) is currently being improved; therefore, we encourage to follow the updates.
       

      The EDS section “Reports” (“Pārskati”) includes the “Overview of transactions” (“Transakciju pārskats”). What does it show? 

      The “Overview of transactions” (“Transakciju pārskats”) available in the subsection “Payment status” (“Nomaksas stāvoklis”) of the EDS section “Payments and payment status” (“Maksājumi un nomaksas stāvoklis”) contains the detailed listing of tax accounting operations with regard to the SRS-administrated payments due to the State budget, i.e., contains all data on the accounting of taxes, estimated amounts, late payment charges, penalties from 1 January 2021, indicating also the allocation of made payments according to the declaration or other calculation. The report can be generated for a particular declaration or payment, selecting data according to the criteria offered in the section:

      • “Period from – to” (“Periods no – līdz”);
      • “Relation document No” (“Saistības dokumenta Nr.”);
      • “Payment order No” (“Maksājuma uzdevuma Nr.”).
         

      Transactions are structured in the descending order starting from the latest transaction.

      Will a tax overpayment actually existing in 2020 automatically be transferred to the single tax account in 2021 and cover new tax liabilities?
      If a tax payment has formed on 31 December 2020, it will be automatically directed to the single tax account.
      The except is personal income tax overpayment, which during the transitional stage - in January 2021 - awaits calculations declared in connection with this tax, e.g the employer’s statement, which must be submitted by 17 January.

       

      Debts and overpayments

      Into which account in 2021 should tax payments be made for which deadline extension was granted in 2020, but whose payment deadline is 2021?
      Starting from 1 January 2021, payments stipulated in deadline extension agreements must be paid into the single tax account. These can be made together with other payable taxes in one sum. In the payment order it is no longer necessary to specify the identification code given to it. Starting from 1 January 2021, these payments will be covered in accordance with the procedures stipulated in Cabinet Regulation No.661 and in accordance with the payment schedule stipulated in the SRS decision - the specified sum shall be covered by the deadlines specified in the decision.

      In 2021 how can I make a tax payment which has been given a payment deadline extension or a willing tax payment schedule identification code?
      Starting from 1 January 2021, the identification code issued by the SRS is no longer valid. Starting from 1 January 2021, in making tax payment deadline extension and willing payment schedule payments, it is no longer necessary to specify your given identification code in the payment order. Starting from 1 January 2021, these payments will be covered in accordance with the procedures stipulated in Cabinet Regulation No.661 and in accordance with the payment schedule stipulated in the SRS decision - the specified sum shall be covered by the deadlines specified in the decision, and these payments can be made together will other payable taxes in one sum.
      The referred to changes do not apply to tax and other payment liabilities that have been settled by the end of 2020. In other words, in relation to payments, which are made in December 2020, the procedures in force in 2020 are valid and the identification code should be specified.

      If the sum that is deposited into the single tax account does not cover all current tax payments, then a tax debt will form. How can I settle this debt? Will a late payment charge and penalty be calculated?
      If, in making a payment into the single tax account, it is not possible to pay all calculated taxes, whose payment term has become due, then the longest standing liabilities found at that time will be covered from the next sum paid. From 2021 no changes have been made to the procedure for calculating late payment charges - just as to date, late payment charges will be calculated for taxed not paid on time.
      In making payments into the single tax account to cover calculated tax debts, it should be taken into account that first the whole principal amount will be covered then - all calculated late payment charges and lastly penalties will be covered if such have been calculated for the specific liabilities.
      Late payment charges are calculated in general cases of missed deadlines, while penalties are mostly calculated as a result of control measures.

      In 2021 how can I find out for which tax late payment charges have been calculated?
      In 2021 information about late payment charges can be viewed in the new EDS section "Payments and the state of instalments". This section shows for which tax and how much late payment charges have been calculated.

      Will only the sum of a debt be shown in the EDS? 
      In 2021 the EDS section "Payments and the state of instalments", one can see tax overpayments and tax debts, as well as calculated future payments, whose payment deadline will be reached during the next month.

      In 2021, will the SRS publicly accessible database data regarding debtors be updated twice a month – on the 7th and 26th dates of the month?
      Starting from 2021 information about debtors in the SRS publicly accessible database will update more often. Updated data will be published with a lag of two or three days. For example, debts for the 3rd date will be shown on the 5th date of the month.
      Data updating takes place automatically as soon as information has been received from the Treasury regarding the fact that the transfer has reached its target, i.e. the monies have been deposited into the State budget account and the tax has been paid.

      Starting from 2021, will Value Added Tax (VAT) overpayments be repaid into the enterprise account or remain in the single tax account?
      With the introduction of the single tax account on 1 January 2021, there will be change in VAT tax repayment procedures. After confirmation of a declared overpayment, it will be repaid into the taxpayer’s account. The exception is if the specific taxpayer has a debt. Then on the date of it is confirmed the overpaid sum will be linked to the longest standing debts and firstly cover those.
      In turn, if the confirmed overpayment is bigger than the taxpayer’s debts, after debts have been settled the remaining sum of money will be repaid to the account specified by the enterprise.

      On which date in 2021 will VAT overpayments be directed to the payment of other taxes – automatically by the 23rd date of the month or on the date that the overpayment is confirmed?
      From 1 January 2021 VAT overpayments will be directed to the payment of other taxes, whose payment deadline has set in by the date of the confirmation of the VAT overpayment, on the date on which this overpayment is confirmed.
      In 2021 will it be necessary to make late payment charges if I want to use VAT overpayments to settle tax debts?
      VAT overpayment will be acknowledged on the date of its confirmation. If by this confirmation date, the payment deadline for another tax has set in and its payment is overdue, then the late payment charge is calculated from the time that the payment deadline has set in until such time as the VAT overpayment is confirmed and directed to covering this debt.

      If a VAT overpayment is formed for January 2021, is it possible to use the difference between VAT overpayment and MSSIC debts be used to cover Mandatory State Social Insurance Contributions (MSSIC)?
      Introduction of the single tax account in 2021 will not affect the procedure for approving VAT overpayments. Just as until now, VAT overpayment will assessed by the SRS and it will be repaid to the taxpayer or linked to any ascertained tax liabilities – regardless of whether there is a MSSIC debt or another tax debt to be covered. Overpayment will only be linked to debt liabilities on the date that the SRS approves the overpayment.

      How will court-repealed extra audit charges will accounted for - as additional taxes and late payment charges or unacknowledged VAT overpayments?
      Interest on the sum to be repaid to the taxpayer for incorrectly recovered or withheld sums will be calculated and transferred, in conformity with Section 28 of the Law on Taxes and Fees.

       

      Employer’s statement and sums paid out to a private individual

      Currently personal income tax (PIT) is paid at the time of the pay out of wages. In contrast, this is included in the employer’s statement and submitted the following month. According to the understanding of the employer, PIT is always overpaid. How will this be in 2021?
      Starting from 1 January 2021, the situation will be eradicated, whereby PIT overpayment forms because it is paid into the budget once a month, but declared the following month. Starting from 1 January 2021, PIT must be paid by the 23rd date of the salary pay out month and included accordingly in the employer’s statement for the reporting month at the same time as MSSIC.

      When do I need to provide the employer’s statement for December 2020, which should be submitted in January 2021? Are there any changes to filling it in?
      Starting from 1 January 2021, the date for the submission of the employer’s statement is the 17th date of the month following the reporting period. Individually notified deadlines for submission of an employer’s statement are no longer valid – all employers should submit this document by a single deadline, i.e. by the 17th date of the month.
      In answering this question, please note that special transitional period procedures are applicable to the employer’s statement for December 2020. This employer’s statement should include data for two months - regarding PIT from salaries paid out in December for November and from salaries paid out in December or January for December.

      How should I fill in the employer’s statement if the employee is on vacation in December 2020 and the vacation continues in January 2021?
      There will be no change in PIT declaration and payment procedures in 2020. Just as until now, in December PIT withheld from vacation monies must be paid into the PIT budget account on the date of the pay out in December. In turn, in the employer’ December statement it must be declared until 17 January 2021.

      If the employer’s statement has already been submitted for the employee, with whom legal employment relations have been terminated on 31 December 2020, does a clarification need to be submitted?
      If the employer’s statement for December has already been submitted and it does not contain all the data regarding the sacked employee, then the missing information about income and social taxes can be specified in the employer’s statement for January.

      In introducing the single tax account, have any changes been stipulated for overviews or deposits in connection with the statement regarding sums paid out to private individuals, because this declaration is also connected to PIT payment?
      In 2021 there will be no changes to the procedure for submitting statements regarding sums paid out to private individuals. At the same time, please note that the payment procedure will change - the tax must be paid into the single tax account. As with all taxes to be paid into this tax account, it must be paid by the 23rd date of the month in which the statement should be submitted regarding sums paid out to private individuals.


      Private individuals’ questions
       

      I am a salaried employee. How will I be affected by the introduction of the single tax account?
      From day to day, introduction of a single account will not affect you. It affects your employer, because starting from 1 January 2021, it will pay calculated taxes into the single tax account.
      In turn, if in connection with the submission of their annual income declaration, a PIT surcharge is calculated, private individuals must also pay this calculated sum into the single tax account.
      In 2021, the annual income declaration must be submitted as until now -starting from 1 March. We remind you that if a tax surcharge has formed, then it is compulsory to submit an annual income declaration, while in order to recover PIT overpaid during the course of the year for eligible expenses (e.g. medical treatment, education, etc.), the declaration can be submitted voluntarily.
      In turn in regard to taxes, which your employer has calculated from your salary, as before you can verify them on the EDS.

      I have registered my economic activities with the SRS, I am self-employed. I pay taxes according to the general mode. Which taxes do I need to pay into the single tax account?
      From 1 January 2021 all declared taxes, including MSSIC and PIT payments must be paid into the single tax account.
      During the period from 1 January until 30 June 2021 there will be no change in the procedure in accordance with which self-employed persons make MSSIC. However, minimal compulsory payments have been introduced starting from 1 July 2021. More information can be found here:
      https://www.vid.gov.lv/lv/esmu-saimnieciskas-darbibas-veicejs

      Will there be any change in the tax payment deadline for self-employed persons who pay taxes according to the general procedure?
      Starting from 1 January 2021 both MSSIC and PIT must be paid into the single tax account. All taxes that are to be paid into the single tax account have the same final payment deadline - the 23rd date of the report submission month. These conditions also apply to self-employed persons.

      During the period from 1 January until 30 June 2021, the procedure according to which self-employed persons make MSSIC will not change. However, starting from 1 July 2021, minimal compulsory payments have been introduced. More information can be found here: https://www.vid.gov.lv/lv/esmu-saimnieciskas-darbibas-veicejs
      We draw your attention to the fact that there will be no change in the deadline for the submission of annual income declarations. In 2021 this must be submitted as before - starting from 1 March. For private individuals - performers of economic activities, as well as individual enterprises, including farms and fish farms, owners, who are PIT payers, - it is compulsory to submit an annual income declaration using the EDS. In turn, private individuals, who do not perform economic activities of any kind, can submit an annual income declaration voluntarily, in order to receive overpaid PIT for eligible expenses (e.g. education, medicine, dentistry, payments into pension funds, etc.).

      In 2021 will there be any changes in the procedures according to which self-employed persons - micro-enterprise tax payers - declare and pay taxes?
      With the introduction of the single tax account, from 1 January 2021 the deadlines for micro-enterprise tax declarations remain unchanged, but the deadlines and procedures for the payment of this tax have changed. In 2021 micro-enterprise tax declarations should be submitted by the 15th date of the month following the relevant quarter, and paid into the single tax account by the 23rd date of the month.
      Starting from 2021, amendments to the Micro-enterprise Tax Law have come into force, which stipulate several important changes, e.g. the fact that this tax can only be applied to one person - the owner of the micro-enterprise. More information about changes can be found here: https://www.vid.gov.lv/lv/esmu-mun-maksatajs-0

      Do license fees need to paid into the single tax account?
      Yes. From 2021, the reduced licence fee should be paid into the single tax account.
      We draw your attention to the fact that changes to legislation have been made from 2021 and only a reduced license fee now remains. Starting from 2021, private individuals that have paid the license fee for 2021 by 18 December 2020 (i.e. no later than seven business days before the specific period when application of the license fee is due to begin), can also apply the license fee mode during 2021 during the period for which the license fee is being paid but no later than by 31 December 2021. More information is available here: https://www.vid.gov.lv/lv/esmu-patentmaksas-maksatajs

      I rent out my apartment and pay 10% PIT. How will I be affected by the introduction of the single tax account?
      From 1 January 2021, inhabitants, who rent out their immovable property and pay 10% PIT from their income, should pay the calculated PIT into the single tax account. These taxes should be paid by the 23rd date of the declaration submission month.
      Just as until now, if a property has been rented out to a business, PIT will be withheld at the time of pay out and it is not necessary to declare rental charges. If the property has been rented out to a private individual who is not an entrepreneur, and you pay personal income tax yourself, it should be calculated according to a resuming procedure, when you submit your annual income declaration to the SRS – the following year.

      I am planning to sell my apartment in 2021. With the introduction of the single tax account, has the capital gains declaration submission deadline changed and thus the PIT payment date?
      In 2021, nothing will change in the declaration submission procedure regarding income from capital gains. Nor is there any change in the terms and conditions for calculating the amount of PIT, and exceptional cases remain in force in which income from capital gains does not have to be paid. However the payment procedure has changed. PIT from capital gains should be paid into the single income tax account by the 23rd date of the month in which the declaration has to be submitted.
      More information about capital gains can be found here: https://www.vid.gov.lv/lv/ienakuma-nodoklis-no-kapitala-pieauguma


      Other questions

      With the introduction of capital gains tax do any changes need to be made to company accounting procedures?
      For the sake of convenience, in regard to accounting we recommend introducing an new intermediary account in which to account for monies transferred into the single tax account. In turn, the relevant sum should be reposted from this intermediary account to specific tax liabilities at such time as information is received from the EDS regarding which liabilities - taxes, overdue monies, etc. - this money is linked to.

      How does the accrual principle work? In this context, what changes need to be made to the company’s accounting procedures?
      The introduction of the accrual principle in accounting for State revenue administered by the SRS does not affect taxpayers’ accounting procedures.
      From 1 January2021, in accordance with the accrual principle, accounting of State revenue administered by the SRS will begin.
      We draw your attention to the fact the taxpayer’s accounting is not affected by the introduction of the accrual principle, but rather by the FIFO principle applied to payments made into the single tax account in order to settle liabilities. We remind you that information about which liabilities will be settled by payments made can be found in the EDS.

       


IMPORTANT

In order for the unified tax account to be available for payment of customs duties by 2023, extensive modernisation of SRS information systems continues, replacing current obsolete information systems with a solution that meets modern technical requirements. Improvements are being implemented gradually, hopefully without interruptions, but temporary disruptions are unavoidable.

Some of the innovations require additional attention from system users: Please note that information about the new XML versions of EDS documents can be found in the Electronic Declaration System section - “Descriptions of formats of EDS electronic documents”.

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