According to the Law on the State Revenue Service, the State Revenue Service is an institution of direct administration subordinated to the Minister of Finance that ensures the registration of tax payments and taxpayers, the collection of State taxes, fees and other mandatory payments specified by the State in the territory of the Republic of Latvia and the collection of levies and other mandatory payments for the budget of the European Union, implements customs policy and organises customs matters.
The State Revenue Service (SRS) was formed in November 1993 by merging the Customs Department of the Ministry of Finance and the State Finance Inspectorate, thus ensuring that the functions of tax administration and the implementation of customs policy were combined within a single authority.
In the course of the operation and evolution of the SRS, many substantial development projects have been implemented. Even though the process of SRS’s improvement and development is continuous, it has to be stressed that the SRS has progressed from being an initially bureaucratic, fragmented and hierarchic organisation to a contemporary and client-oriented public administration institution.
Evolution of SRS from 1994–2017
- Main Events in 2017
The new SRS Performance and Development Strategy for 2017–2019 was developed.
The Advisory Board was established for improving cooperation with the unions of entrepreneurs, associations, non-governmental organisations and other interested parties.
The educating initiative «Ask for a cheque!» was implemented. In cooperation with the members of the Association of Hotels and Restaurants of Latvia, visual and informative materials were placed in hotels and restaurants, explaining the difference between a preliminary cheque and a cheque, and encourage inhabitants to request and receive exactly the cheque.
The International Competition of Customs Dog Handlers with Tobacco Sniffer Dogs was organised for the first time with the participation of customs representatives from Lithuania, Estonia, the Czech Republic, Russia and Latvia.
A tax support event was organised, ensuring taxpayers, for which a tax debt has occurred, a possibility of fully extinguishing late payment charge and penalty provided that the principal tax debt is paid by 31 December 2019.
The implementation of the project “E-Customs (Stage 1)” co-funded by ERDF was commenced.
The implementation of the project “Modernisation of tax information services, MAIS core” was commenced.
The Electronic Declaration System (EDS) was improved; main novelties:
- information about the predicted monthly non-taxable minimum was provided: to employers about employees — in the report “Data of submitted salary tax booklets”, to employees — in a salary tax booklet;
- the new EDS support function was ensured: the integrated machine translation service with possibilities of displaying the EDS interface in English and Russian.
- a solution ensuring the direct access of customs customers to European information systems was introduced.
The Electronic Customs Data Processing System (ECDPS) was improved; main novelties:
- link to the EC central Customs Decisions System was established, ensuring the electronic application for and receipt of all customs authorisations and certificates stipulated by the Union Customs Code.
- the new functionality was developed and introduced for the electronic submission and processing of export declaration adjustments and cancellation requests after the release of goods.
Information exchange was ensured in accordance with the requirements of the Global Standard of the Organisation for Economic Co-operation and Development (OECD) on Automatic Exchange of Information about financial accounts.
The Saeima received amendments to the Law On the State Revenue Service, stipulating merging the finance police and the customs police into a single investigating institution, i.e., the SRS Tax and Customs Police Department.
For the purposes of enhancing analytical capacity, the Tax Administration Risk Management Unit was established.
For the purposes of enhancing capacity in the field of anti-money laundering and counter-terrorist financing, the Anti-Money laundering Department was established.
- Main Events in 2016
An extensive informative campaign “Popularisation of the Electronic Declaration System” has been implemented, within the framework of which free training seminars were organised, consultations were provided, press releases were prepared, and visits with the SRS “E-Bus” to different cities of Latvia were organised to provide assistance in mastering SRS e-services and submitting the annual income declaration in EDS.
The Electronic Declaration System (EDS) has been improved with the following novelties introduced:
- a possibility of making online regular payments and tax debt payments for taxes collected inland, as well as monitoring the execution of payments made;
- a report to employers on closed and annulled sick-leave certificates (information is received from the NHS E-Health System);
- automatic entry of information in the annual income declaration regarding the tuition fee paid by persons to educational institutions;
- automatic warning of State officials about the deadline for the submission of declarations (three days prior to the deadline); 2 mobile applications:
– “Eligible Expenditure” for uploading cheques;
– “Suspicious Transactions” database for purchase cheques of inhabitants;
- a possibility of viewing reminders on tax payment deadlines and document submission deadlines and making payments of calculated taxes or performing submission of documents, as well as asking for prolonging the term.
The following improvements have been introduced to the Electronic Customs Data Processing System (ECDPS):
- ECDPS has been adjusted for work as of 1 May 2016 in accordance with requirements set forth in the Community Customs Code, for which no transitional period is stipulated;
- by introducing changes to the ECDPS architecture, the availability of the system has been increased, reducing planned IS operation interruptions;
- the response speed of the system has been increased;
- ECDPS has been linked to the EC Registered Exporter System (REX), EC Reference Data System (CS/RD2), and VAT information exchange system (VIES).
As of 05.09.2016, a new SRS website is available to the public, wherein information is structured by the target groups of taxpayers and is made more taxpayer-friendly, i.e. more illustrative.
The control measures of TARIC data credibility determined by the European Commission have been introduced in the Integrated Tariff Management System.
The accounting of administrative violation cases has been introduced in the single accounting system APLIS.
- Main Events in 2015
The first State Single Customer Service Centre in Latvia was created. It started its operation on 5 January 2015 at the SRS’ new complex of administrative buildings at 1 Talejas Street, Riga, where customers can receive services provided by the State Employment Agency, the State Labour Inspectorate, the State Social Insurance Agency and the State Revenue Service in a single place.
The Electronic Declaration System has been improved with the following novelties introduced:
- the “Payment Calendar” on outstanding, regular and soon-to-be-made tax payments and amounts has been created. 2 days prior to the due date, a reminder/notification on making a payment will be reflected;
- automatic informing about the risk assigned as the result of the last analysis and sending of a notification of inclusion in the group of risky taxpayers has been ensured;
- all taxpayers are ensured of information on risk — reports on discrepancies of data specified in VAT declarations, which used to be available only to the participants of the Enhanced Cooperation Programme and members of the association;
- available information — average salary per hour broken down by occupations;
- all taxpayers are informed about the presence of overpaid taxes;
- an opportunity to prepare and submit declarations for the future taxation period and to specify the time for their submission has been ensured;
- filling-in of SRS data when completing reports on the use of tickets and receipts certifying transactions has been ensured.
- three e-services have been introduced for customs customers:
- for making tax payments in online mode, using the portal www.latvija.lv;
- for the electronic submission of adjustments of an import customs declaration or cancellation applications after the goods have been released (post-customs clearance);
- for submitting and executing an electronic re-exportation notice
- a new functionality for the electronic submission and execution of temporary storage declarations, as well as for the single registration of goods in the places of temporary storage;
- the process of consolidation of export cargo has been electronised;
2 sections have been created on the SRS website, in the SRS public database:
- Receipts certifying transactions;
- Payers of micro-enterprise tax.
On 1 April 2015, information on the total amount of taxes administrated by the SRS, which were paid by taxpayers (merchants) during the taxation year, was published on the SRS website for the first time, specifying the total amount of personal income tax and total amount of mandatory state social insurance contributions, as well as the average number of employed persons.
The Document Management System has been introduced for registering documents received by the SRS and adding resolutions.
- Main Events in 2014
Introduces entrepreneur registration Mini One-Stop Shop system (M1SS), for participation in the specific VAT regime in accordance with EU Council Regulation No.967/2012.
Improves Electronic declaration system (EDS) – updates:
- new EDS design, section structures, simplified usability, separation of natural persons and legal persons access to site;
- warning taxpayers about debts;
- the possibility to use www.latvija.lv services to register as an EDS user online;
- EDS filing algorithm – the documents submitted need not to be approved using the SRS e-signature file;
- automation of taxpayer representative right assignation and cancelation;
- EDS mobile version;
- informing the taxpayer about the counterparties suspension of business activities, which is specified in the declaration, during the date of transaction available taxpayers declarations filling plan and warning of overdue declarations;
- the ability to the taxpayer to calculate the amount of debt on a certain date (calendar);
- implemented electronic personal payroll tax booklet;
- data selection for public officials declarations from the Administration of Justice and the Office of Citizenship and Migration Affairs.
By implementing the project „Electronic customs processing system (EMDAS) design, development and maintenance”, introduces new procedure for import customs clearance system, which replaces system ASYCUDA used since 1999, thus ensuring common entrepreneur access not only to transit and export, but also import customs declarations for submission and processing in EMDAS. Implements common SRS client service standard.
June 26, 2014 new SRS administrative building complex is revealed on Talejas Street 1, Riga, comprising:
- common call center, change of the SRS information telephone number to 67120000;
- one SRS client service center – all previous Riga SRS client service centers are located in one place;
- import customs control point, implementation of remote release procedure with regard to the introduction of goods.
Makes amendments to the law „On State Revenue Service” – renaming Customs Criminal Board to Customs Police Department.
- Main Events in 2013
Provides automatic vehicle and container number recognition system linking into a single network for Latvia, Lithuania and Estonia. Initiates a procedure to conclude a prior agreement with the taxpayer about the market price (value) determination of acquisition of goods from foreign affiliates.
Develops Electronic Declaration System:
- provides VAT taxation period declarations together with attachment as a single document;
- facilitates completion of the annual income declarations;
- establishes a mutual communication platform for EDS users;
- improves authentication of EDS – from the address www.latvija.lv.
Customer Service program at SRS homepage www.vid.gov.lv:
- provides the ability to electronically apply for SRS-site news and in-depth consultations;
- sets up e-mail addresses – in connection with the introduction of the euro:: vid.eiro [at] vid.gov.lv and customer control service: VID.serviss [at] vid.gov.lv;
- develops publicly accessible database (register) about individuals pursuing economic activity;
- establishes SRS administered taxes and duties debtor database.
Launches regular and active cooperation with Latvian Employers’ Confederation and Latvian Chamber of Commerce and Industry on current tax administration issues. Implements adaptations in order to allow 12 SRS information systems to start working with euro from 1 January 2014.
- Main Events in 2012
SRS implements initial declaration which gives an opportunity to legalise revenue — SRS accepts property status declaration from the citizens of Latvia. SRS implements the second stage of Excise Movement and Control System (EMCS). Audit function (in customs and in tax fields) is united in one structural unit, which is called Tax Control Department; SRS increases tax control capacity. Taxpayers begin to apply to In-depth Cooperation programme, which provides to its participants different state benefits and reliefs. SRS runs Tax Support campaign during which taxpayers can be relieved from 90% of penalty charge if they pay the principal sum and 10% of penalty charge within the specified term. SRS publishes a list of taxpayers whose economic activity was stopped due to violations of regulatory acts. SRS starts the adjustment of information system to euro. New SRS organizational structure is approved. Within the new structure director general has four deputies.
- Main Events in 2011
The SRS Tax Debt Enforcement Department is established, thus centralising and taking over all the functions related to the enforcement process from other structural units. To ensure uniform provision of services, the Taxpayer Service Standard is introduced at the client service centres, as are the Customs Client Service Standard and Customs Clearance Standard at customs institutions. A Register of Public Benefit Organisations is created and published on the SRS website. The staff of the SRS information hotline, 1898, is doubled.
- Main Events in 2010
The restructuring of the SRS is completed, whereby a single-tier structure is created while preserving the presence of 31 client service centres throughoutLatvia. Also, 31 customs control points continue operations as before. An Information Systems Security Management Division is formed under the direct supervision of the SRS Director General, tasked with ensuring the appropriate execution of information systems security processes. A new form of cooperation with businesses is launched: agreements with industry associations, in order to reduce tax avoidance by economic operators, particularly by way of “envelope wages” (cash in hand) and to restrict opportunities for unfair competition and interest businesses in putting the matters related to tax compliance within their industry in order. The SRS takes over the functions of administering public benefit organisations from the Ministry of Finance. Stage 1 of the Excise Movement and Control System (EMCS) is implemented. SRS runs informative campaign on the EDS. The aim of the campaign is to remind that starting from 1st January 2011 juridical entities must submit their tax and informative declerations electronically.
- Main Events in 2009
The SRS embarks on comprehensive reorganisation by optimising service functions and centralising processes. The SRS Administrative Department is established thus centralising personnel management and resource provision. The SRS territorial offices are abolished, and the creation of a single-tier SRS structure is commenced. Taxpayers can dispute service decisions according to simplified (single-level) procedures: directly to the SRS Director General. A register of services provided by the SRS is developed. Descriptions for the provision and receiving of services are posted on the unified State and local government service web portal, www.latvija.lv. Public access is provided to information on registered VAT-taxable persons and persons excluded from the register. In accordance with the requirements of EU regulations, a number of new customs information systems are introduced: the Import Control System (ICS), the Export Control System (ECS) and the Economic Operator Registration and Identification (EORI) system. The RASA Natural Persons Risk Analysis System is introduced in the operations of the SRS, which enables the analysis of risks associated with natural persons and the screening of natural persons with a high tax evasion risk for the purpose of conducting preventive and tax control measures.
- Main Events in 2008
A free SRS trust hotline, 80009070, and a single information hotline, 1898, are set up. The range of options offered by the Electronic Declaration System is expanded: documents created within the Electronic Declaration System can be signed with a secure digital signature issued by VAS Latvijas Pasts, and new registrations of clients of the Electronic Declaration System are possible without signing an agreement with the SRS in paper form. SRS runs a campaign ”CASH IN HAND IS FOOLISH!”. The aim of the campaign was to raise discussion in society, to form a negative attitude towards cash in hand and to explain that such type of salary prevents citizens from taking loans, receive unemployment compensations and many other social benefits; another objective was to promote free hotline of SRS. For the second consecutive year SRS holds a range of social education events ”Day of all Opportunities” for schoolchildren. Children and teenagers who own a dog had an opportunity to participate in an event ”My Well-behaved Friend”. Together with this event there was also a 6th European Championship of Customs Drug Searching dogs; dog handlers from 19 countries participated in the aforesaid event. Opening ceremony of Customs and Taxes Museum of Riga Technical University. During the ceremony there was a presentation of a book ”Taxes, Duties and Customs in Latvia”.
- Main Events in 2007
Users of the Electronic Declaration System are offered a new online service: receiving information on the status of the taxpayer’s tax payments. The SRS conducts scale campaign, All That is in an Envelope is not Gold, to draw the attention of the general public to the risks and losses caused by “cash in hand” wage payments and to encourage a change of public attitudes. In order to encourage tax payment and change the way of thinking of society SRS implements campaign ”What Happens to Your Taxes” explaining what happens to the money of taxpayers. For the first time in its existence SRS holds a range of social education events ”Day of all Opportunities” for schoolchildren. Children are taken on the tour called ”On a Visit to SRS”, they participate in an event ”SRS and School Games” and children and teenagers who own a dog have a great opportunity to take part in an event ”My Well-behaved Friend”. The aim of this Project was to introduce children with the SRS and its activities, provide overall and educational information and present SRS as a good opportunity for their future employment.
- Main Events in 2006
Taxpayers may file electronic returns to the SRS in electronic form only, certified with a digital signature, using the services of the Electronic Declaration System. For the purpose of improving the level of service at the territorial offices of the SRS, “internet kiosks” are installed where taxpayers can undergo on-site user training for the Electronic Declaration System and use the system. SRS implements campaign ”An Accountant with a Free Time!” encouraging citizens to use EDS; as a result submission of reports becomes less time consuming and the paperwork is reduced. The SRS introduces a single institutional financial management, planning and accounting system consisting of mutually integrated modules: “Financial Accounting”, “Personnel Data Records” and “Management Accounting”. An Audit Support Information System is introduced in the operations of the SRS, which is used in the tax auditing process. The Audit Support Information System enables the option of highly automated audit preparation and the compilation of audit results, thus reducing the time spent on tax audits and improving the quality of tax auditing.
- Main Events in 2005
The SRS takes over the functions of the commissioning and receipt of excise duty stamps and the payment of the procurement expenses thereof from the Ministry of Finance, thus ensuring a faster service for taxpayers and a more rapid response to changes in the orders of excise duty stamps. The new version of the SRS website is designed, which is more user-friendly compared to the previous version. Taxpayers can use it to submit queries electronically. In order to improve the tax control operations, the SESAM computerised accounting audit software is implemented in the operations of the SRS.
- Main Events in 2004
Following the accession of Latvia to the European Union (EU), permanent customs control on the internal EU borders (Latvian borders with Estonia and Lithuania) is abolished, while customs control is reinforced on the external EU border (Latvian borders with Russia and Belarus). The SRS customs institutions involved in the combating of smuggling undergo reorganisation: a framework for customs control on the internal EU borders and a single management system for information relevant in the combating of smuggling are created. All functions of the prevention and combating of smuggling are assigned to the SRS Customs Criminal Board, and territorial units are created. In connection withLatvia’s accession to the EU, the number of customs control points is optimised (from 195 customs control points in 1998 to40 in2004). Customs and sanitary border inspection control facilities are launched at the Free Port of Riga, the Free Port of Ventspils, theDaugavpilsrail cargo station and the Rēzekne rail cargo station. The Integrated Tariff Management System (ITMS) and the Computerised Transit Control System (NCTS) are implemented to ensure the operation of Latvian customs in direct online mode with the corresponding EU systems. The ESKORT computerised audit object selection system is introduced in the operations of the SRS. The SRS information hotline for tax administration matters is launched.
- Main Events in 2003
The SRS Personnel Department is merged with the Training Organisation Division, forming the SRS Personnel Management Department. A Taxpayer Advice Coordination Division is formed under the SRS Main Tax Board to ensure the uniform application of tax regulations.
- Main Events in 2002
The transition to a three-tier organisational structure is completed by establishing six SRS territorial offices. The SRS Customs Criminal Board is established, which is engaged in matters of smuggling and performs the operational activities specified by law in order to uncover and prevent customs-related criminal offences. The organisational structure of the SRS Finance Police Department is modified by the establishment of regional offices. The implementation of the Automated System for Customs Data (ASYCUDA) is completed at all customs control points inLatvia.
- Main Events in 2001
The Vidzeme regional office of the SRS is created and the SRS Zemgale regional office is expanded. The Electronic Declaration System (EDS) is launched, where documents filed digitally were initially also submitted in paper form.
- Main Events in 2000
The upgraded Silene customs control point on the Latvia-Belarus border is opened. Cooperation is expanded with State institutions, businesses and industry associations. Mutual cooperation memorandums on information exchange are signed between the SRS Main Customs Board and the State Police, the Central Statistical Bureau, the Enterprise Register of theRepublicofLatvia, theRigaPassengerPortand the Latvian Fuel Traders Association. The SRS website is created. The Excise Duty Goods Department is reorganised and attached to the SRS. In order to promote trade and facilitate the operations of businesses and customs, electronic customs declarations are now accepted by customs authorities.
- Main Events in 1999
The implementation of the SRS Modernisation Project for 1999-2002 commences. The revamping of the organisational structure is commenced: territorial offices are created, modern customer service areas and customs control points are set up. Two pilot regions are created: the Zemgale and Latgale regional offices. A pre-trial tax dispute appeals unit is established that operates outside the tax and customs administrations and reviews complaints regarding the decisions adopted by officials of the SRS tax administration and customs. As part of the implementation of the modernisation programme of border-crossing points, the construction of two customs control points is completed: the Pāternieki customs control point on the Latvian-Belarusian border and the Grebņeva customs control point on the Latvian-Russian border commence operation. The SRS Internal Audit Division is formed.
The following steps are undertaken as part of the implementation of the SRS Information Technology Project:
- upgrade of the tax records system;
- cooperation with other State registers with respect to the mutual exchange of information;
- regular information exchange is commenced in digital form with the Population Register, the Enterprise Register and the State Social Insurance Agency (SSIA);
- all territorial offices of the SRS, the majority of the customs controls points and the major border control points are connected to the global SRS network.
The SRS Main Customs Board concludes mutual cooperation memorandums on information exchange with the Narcotics Combating Bureau of the Ministry of the Interior, the Ministry of Agriculture, theRigaInternationalAirportand other partners.
- Main Events in 1998
The SRS takes over the administration of the social tax and all related functions from the State Social Insurance Fund of the Ministry of Welfare. The joint Latvian-Estonian customs control points Veclaicene-Murati and Ainaži-Ikla commence operation. The first upgraded customs control point on the Latvian-Russian border – the Terehovo customs control point of the Ludza District Customs Department – commences operation. Treaties are concluded between the tax administration authorities ofLatviaand a number of other countries as part of conventions and on the bilateral level regarding mutual assistance and information exchange within the scope of tax conventions and regarding the prevention of double taxation and tax evasion. For the first time in its existence SRS expresses gratitude to the largest tax-payers of the year.
- Main Events in 1997
The joint Latvian-Lithuanian customs control point Grenctāle-Saločiai commences operation. The Customs and Entrepreneurs Advisory Council is established.
- Main Events in 1996
The Financial Enquiry Department becomes the SRS Finance Police Department (the finance police). The Tax Control Department becomes the SRS Main Tax Board. The SRS IT Department is formed. The implementation of the SRS Information Technology Project commences.
- Main Events in 1995
The Cabinet issues the Regulation "On Register of Taxpayers”, and a single database of all taxpayers is created. The SRS establishes the Large Taxpayers Department, which comes to supervise 20 of the largest Latvian taxpayers at the time. The government of theRepublicofLatviasigns treaties with a number of European states on cooperation and mutual assistance in customs matters.
- Main Events in 1994
The Saeima (parliament) passes the Law on Customs Duty (Tariffs). The Cabinet issues an order whereby the construction, expansion and improvement of customs control points and entry and exit points is assigned to the supervision of the SRS. The SRS Financial Enquiry Department is formed for the purpose of ensuring the functions of financial enquiry and operational activities in the field of tax administration.