What is a taxpayer rating?

The taxpayer rating is an assessment made by SRS, based on the company's fulfillment of tax obligations.

Every company can see its rating and an explanation of how it is formed in its EDS profile. Rating indicators are designed as an explanatory road map for improvement:

Green indicators are perfect.

Yellow indicators require attention and improvement.

Red indicators are critical and urgently need improvement.

The explanation of how the rating is formed is visible only to the company.

The taxpayer rating is for information purposes.

A – Good performance. Timely and complete tax payment discipline and no significant risks. This company is a reliable taxpayer and can be a reliable cooperation partner.

B – Needs improvement. Generally fulfils its obligations to the state, but there is room for improvement - timely submission and more accurate preparation of declarations, declaring and paying all taxes on time. A level B company can be a business partner, but it is worth evaluating the terms of cooperation and whether the company has significant tax debts or not.

C – Violations exist. excluded from the VAT payer register for violations or SRS has suspended economic activity. The ability of such companies to fulfil their business obligations should be evaluated critically, and if the economic activity of the company has been suspended, transactions with it are prohibited by law.

N – Inactive taxpayer. According to information submitted by the company, do not conduct economic activity. When starting cooperation with such a company, it should be assumed that for at least 6 months there have been no declared transactions, and there are no employees to whom salaries have been paid.

J – Newly-registered. Taxpayer registered within the last six months. It has not yet had time to prove itself, but any new beginning made in good faith is welcome.

Which companies are rated?

All companies, branches of foreign companies, farms, fisheries, and individual companies will be rated if they submit an annual report.

How is the taxpayer rating determined?

SRS uses six sets of indicators based on fulfilment of tax obligations when determining taxpayer ratings. A value is based on a specific date (e.g., the state of tax debt) or for a certain period of time, which is not less than six months (e.g., wage levels, imposed administrative fines).

The rating is revised every three months.

The six sets of indicators are:

  1. Registration data. SRS checks whether bankruptcy proceedings have not been initiated, whether economic activity has not been suspended, or whether the company has not been excluded from the VAT payer register. The rating is also influenced by company officials' history of ​​tax compliance.
  2. Timely submission of declarations and reports.
  3. Tax payments. For a good rating, it is important to pay taxes on time and in full, but if a debt arises, you can contact SRS (in time) and agree on payment of the debt in instalments.
  4. Penalties. Anyone can make mistakes and fines occur, even for honest companies. However, it is important that the proportion of fines is small compared to total tax payments and that the size of the fine does not indicate a serious violation.
  5. Wage assessment. SRS compares the wage paid by the company with the average wage in the relevant industry and region as well as in the country. Unusually low wages indicate undeclared wage risks and can lower the rating.
  6. Information that may indicate violations. The rating may be reduced by risks revealed in SRS risk analyses.

What benefits do "A" rated companies receive?

Companies with an A rating have proven their integrity. Therefore, SRS does not plan control measures for them (unless warranted) and provides priority support if the company needs it. In general for A-level companies, SRS plans only those control measures imposed on Latvia by international obligations – customs controls established throughout the European Union and transfer pricing controls established at the OECD level for transactions between companies.

A-rated companies receive several benefits from SRS in taxes and customs to make relations with the state as convenient and simple as possible.

What information about the rating is publicly available?

Anyone interested is able to view the company's taxpayer rating assessment in the database published by the SRS.

More detailed information about the taxpayer's rating indicators will also be visible in the future only to the company itself and will not be publicly available.

The law behind this initiative

The Law On Taxes and Fees requires: 1) the SRS provide a publicly available overall assessment of the rating of taxpayers to promote the voluntary fulfillment of tax obligations and 2) the right of taxpayers to receive information from SRS through EDS on the indicators for fulfillment of tax obligations that SRS used to determine the overall assessment.

Contact information for questions about the rating system

If you have any questions about your rating, we will be happy to answer them and help you make full use of this new tool.

You can ask through EDS in the "Correspondence with the SRS" section, selecting the "Taxpayer rating" category or by calling the special helpline at +37167120022.