To ensure systematic accounting for VAT and prevent evasion where a supply continues for a long time and the tax point is difficult to identify, the VAT Act lays down time limits for issuing a tax invoice and reporting VAT. But are those deadlines applicable to a supply between two Latvian-registered taxable persons where the customer is responsible for accounting for VAT (“local reverse charge”)?

Many wholesalers and service providers allow volume discounts and other types of after-sales discounts. This article explores how a discount affects the VAT charged earlier in accordance with legislation.

Recent years have seen new players rapidly entering the financial services market: FinTech companies. The name itself suggests that these companies are operating where financial services meet technology. FinTech companies are promoting and developing the banking business and are themselves becoming an alternative to traditional banking. This article explores some key VAT issues facing FinTech companies.

In its ruling C‑787/18 (Sögård Fastigheter AB) of 26 November 2020 the Court of Justice of the European Union (“CJEU”) looked into an obligation to adjust input tax on capital goods in a supply of real estate (“RE”) and which party is liable. This article explores some of the CJEU findings.

Does the land owner – a taxable person registered for Latvian VAT – have a right to demand payment of VAT in a forced lease of land? And should the amount of VAT be included in or paid on top of the rent? In this article we are looking for answers.

This article serves as a reminder of who is liable to file Intrastat reports and how the information to be disclosed will change from 2021.

In our Flash News editions of 6 March and 15 May 2020 we said that the EU is planning to simplify the VAT treatment of e-commerce and Latvia is planning to amend the VAT Act on e-commerce. This article explores the progress in adopting these changes and the latest e-commerce developments in the UK.

This article completes what we wrote last week.

Compensation for loss is not subject to VAT but how do we know whether the amount that becomes payable if the customer terminates a fixed-term service contract through their fault, is a contract penalty, compensation for loss, or consideration for services? In their guidance “VAT Treatment: Questions and Answers” the State Revenue Service (“SRS”) explains that VAT is not charged on a contract penalty, down payment, deposit or compensation unless this is consideration for a supply of goods or services. This article explores two rulings in which the Court of Justice of the European Union (“CJEU”) explains how to assess whether compensation received is essentially consideration for services.

Under the Taxes and Duties Act and the State Revenue Service (“SRS”) Act, the tax authority has a wide range of tasks and responsibilities in tax administration. The SRS monitors the economic and financial activities conducted by all entities and individuals and enforces compliance with the tax laws. To fulfil its statutory responsibilities, the SRS carries out various control measures, from ones that can go unnoticed by the taxpayer until a certain moment to serious inspections requiring the taxpayer’s presence. This article explores thematic reviews as well as their substance, key aspects, and expected outcomes.

In this article, you will find a summary of the latest developments in the Estonian tax system.

On 2 July 2020, the Court of Justice of the European Union (“CJEU”) ruled on case C-835/18 (SC Terracult SRL). The dispute was over the tax authority’s refusal to allow a taxable person to adjust invoices after the tax authority had completed a tax audit and assessed an additional tax liability, thus denying the taxable person’s right to a tax refund. The tax authority’s decision was final because the taxable person had accepted it. The taxable person sought to adjust invoices on the basis of new facts which were not known when the tax authority made the decision and which resulted in reverse-charge VAT being applied to the underlying transactions.

Given the impact of Covid-19 on many companies, on 14 July the Cabinet of Ministers adopted regulations to allocate EUR 19.2 million in aid to companies in the tourism industry and EUR 51 million in aid to exporters whose financial position has significantly deteriorated as a result of Covid-19. The new rules will come into force on the effective date of the European Commission’s decision on the compatibility of business aid with the EU internal market. This aid will be administered by the Latvian Investment and Development Agency, awarding it within the available finance allocation and by reference to the sequence in which aid requests are submitted. The aid will take the form of a grant aimed at helping companies pay wages and salaries.

In its ruling of 11 June 2020, the Court of Justice of the European Union (“CJEU”) answered preliminary questions asked by a Romanian court as to whether moving goods to another member state constitutes a deemed intra-Community supply and whether the existence of a VAT identification number or the requirement for identification denies the right to a VAT refund in another member state under the 9th directive. This article explores the CJEU findings.

On 5 June 2020, Parliament adopted the Handling of Covid-19 Consequences Act in its final reading. The new law aims to lay down a legal basis for support measures after the end of the emergency situation caused by the coronavirus pandemic.