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Latvian Saeima wants more control over trade of goods and services on the internet

Photo: pixabay.com.
Saeima’s Budget and Finance Committee has conceptually supported amendments to the Taxes and Duties Law that provide for stricter control for the circulation of goods and services on the internet, as reported by Saeima’s press-service.

Amendments are planned to improve accessibility of information the State Revenue Service needs for the tax administration process. Internet traders will have to submit information to SRS not only in regards to tax payers, but also all clients that purchase goods from them or use services on the internet.

Saeima notes that the legislative draft also makes it a duty for payment card data processing companies, electronic money processing institutions and other technical assistance companies to provide tax service with data they have stored detailing economic activities of other tax payers.

This measure is needed so that SRS is able to identify economic activities and acquire information regarding possible hidden income of active businesses. Data already held by SRS shows that businessmen’s transactions using electronic money may be proof of their reluctance to declare income, as mentioned in the annotation to the legislative draft.

Because SRS is unable to get information regarding foreign businesses’ transactions in Latvia from foreign tax administrations, because it is not possible to provide proof of tax avoidance in Latvia, amendments are intended to establish a duty for credit institutions to inform SRS of the extent of transactions performed by specific businesses in Latvia.

In addition, SRS will be able to acquire information from postal companies as well. The information the tax administration is interested in revolves around people who use postal company services to conduct their own business. Finance Ministry notes that postal businesses represent an important link for digital commerce: goods offered using websites or mobile app are delivered to buyers using postal services.

Saeima’s press-service notes that SRS has identified more than 20 foreign websites whose owners regularly deliver goods to Latvian residents, and which have to register as VAT payers and pay relevant tax. However, they do not pay VAT, thereby causing the state budget considerable losses, the Finance Ministry mentioned in the annotation.

The legislative draft also provides for improving the regulation that permit closing the domain if violations are uncovered.

Amendments to the Taxes and Duties Law still have to be viewed by the Saeima before their approval.


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