Tax Debt

 Published: 20.09.2016. 09.57


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  • Tax debt with regard to which the SRS has already commenced the recovery proceedings 
    • The taxpayer is entitled to submit a motivated written application to the SRS asking the SRS to adopt a decision on voluntary payment of delayed taxes by setting a deadline for the taxpayer for a term of up to three years (in accordance with Section 26, Paragraph eleven of the Law On Taxes and Duties) in the following case:

      • if the decision on the recovery of the delayed taxes has already been adopted with regard to the taxpayer and such a decision has not been adopted later than six months ago, as well as there are no pending insolvency-, legal protection- or extrajudicial legal protection proceedings with regard to the taxpayer, and if the taxpayer is confident of his/her ability to perform the payment of the debt stated in the application.

       

      The application may be filed via the Electronic Declaration System of the SRS, by post or in person. Please use the form suggested by the SRS which is available under the section “Tax Debts/Forms and Submissions/Application on Voluntary Payment of Delayed Taxes”.

  • Application of the Legal Protection Proceedings 
    • If the taxpayer, having assessed the financial situation, is confident that he/she will be able to solve the financial difficulties by implementing the legal protection proceedings, the taxpayer should take into consideration the fact that, in the cases provided by the Insolvency Law, the consent of the SRS is necessary for the implementation of the plan of measures of legal protection proceedings (Section 38 of the Insolvency Law). An application requesting a consent from the SRS for the implementation of the plan of measures of legal protection proceedings  together with the plan of measures of legal protection proceedings attached thereto may be filed via the Electronic Declaration System of the SRS, by post or in person.
  • Applying for insolvency proceedings
    • If there are grounds to establish that the liabilities of the delayed tax payments cannot be implemented, we would like to remind of the obligation prescribed by the Insolvency Law to file an application for the insolvency proceedings to the court. Information on the insolvency proceedings is available on the homepage of the Insolvency Administration.
  • Delayed tax payments recovery proceedings, their suspension
    • The recovery of delayed tax payments is performed in accordance with Section 26 of the Law On Taxes and Duties on the basis of the decision on the recovery of the delayed tax payments and applying the following recovery measures:

      • cash shall be written off from the taxpayer’s bank account with the bank or from an account opened with any other legal person which is not a credit institution and which is engaged in the business of non-cash settlements on the basis of a collection order on behalf of the SRS;
      • by seizing cash from the cashier’s office of a legal person or individual merchant or other places of storage in accordance with the procedures stipulated by the Cabinet of Ministers;
      • in accordance with the procedures laid down in Part E of the Civil Procedure Law, the recovery of delayed tax payments on an uncontested basis shall be applied to the property of the taxpayer (moveable and immovable property, including the property located with third parties. The recovery of the property shall be commenced if the tax administration has been unable to cover the delayed tax payments and the costs incidental to the recovery thereof on an uncontested basis from tax overpayments, collection orders and seizing cash.

       

      The decision on the recovery of the delayed tax payments is implemented by the tax administration or by a sworn bailiff.

      The recovery of delayed tax payments on an uncontested basis shall not commence and the commenced recovery of delayed tax payments on an uncontested basis shall be suspended provided at least one the following conditions exist:

      • the decision taken on the basis of the findings of the control procedure (a review or audit) carried out by the tax administration has been challenged – for the period of the pre-trial examination of the application in accordance with the procedures laid down in laws and regulations;
      • the due term for the payment of the tax has been extended, deferred or divided in instalments – in respect of the portion of extended tax payments or the deferred tax payment;
      • the circumstances specified in Section 560; Section 563, Paragraph one, Clause 4 or 5 or Paragraph two of the Civil Procedure Law have occurred;
      • a decision by the tax administration or a court decision has been taken according to which the recovery of delayed tax payments on an uncontested basis is suspended;
      • a court adjudication has entered into effect according to which the taxpayer has been declared insolvent or a decision of the court to initiate the legal protection proceedings has entered into effect. After declaration of the insolvency proceedings or initiation of the legal protection proceedings in the court the taxpayer shall perform all current tax payments in accordance with the requirements laid down in tax laws;
      • the tax administration has adopted a decision on voluntary payment of the delayed taxes - with regard to the part of the payment the decision on voluntary payment of the delayed taxes refers to.
  • Measures limiting the violation
    • If the taxpayer does not use his/her rights provided by the Insolvency Law to file an application for the insolvency proceedings to the court or to apply the legal protection proceedings as well as does not voluntarily perform the payment of the tax debt by applying any of the possibilities provided by the tax laws, the following measures limiting the violations may be applied to the taxpayer:

      • a natural person (performer of economic activities or an official of a commercial company) may be included in the list of persons of risk;
      • the SRS may suspend the economic activities of the taxpayer (or that of its structural unit where the violations has occurred) - suspension of economic activities;
      • administrative liability in accordance with Section 16635 of Latvian Code of Administrative Violations may be applied to a Member of the Management Board or a natural person by imposing a fine in the amount ranging from 280 euro to 700 euro with or without forfeiture of rights of the Member of the Management Board to hold particular offices;
      • a person may be subject to criminal liability for evasion of tax payments and payments equivalent thereto.