The State Revenue Service (SRS) has drawn up guidelines to explain how traders doing business over the Internet should register a website as a business unit. This article explores the main aspects of the registration process.
The registration requirement
The obligation to register a website as a business unit arises if that site fits the definition given in section 1(24) of the Taxes and Duties Act. In other words, if it is possible to order (book) and/or pay for goods or services on a website, then it should be registered as a business unit using the SRS’s Electronic Declaration System (EDS).
Things to consider
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The website address should be indicated as the name of the business unit, and “website” should be stated as the type of business unit on the EDS.
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The name of the business unit should follow the format www.domain.lv (.eu, .com etc) or www.subdomain.domain.lv (.eu, .com etc). It is important to note here that each website should be registered as a separate business unit.
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A taxpayer doing business on a trading platform should register his profile/shop set up on that platform, e.g. www.ebay.com/sch/name, where “name” is the name of the taxpayer’s profile.
If another person owns the right to use a domain, the taxpayer should hold a document allowing him to use the domain name in order to register his website as a business unit.
The identification requirement
It is important to remember that a trader offering goods or services on the Internet is required to identify himself.
Entities are required to give –
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their company name;
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registration number;
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the actual address or place of business, such as a website or a mobile app;
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contact details; and
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licensing details if necessary.
Individuals that carry on business are required to give –
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their first name, last name, and the second part of their personal identity number (the first part may be omitted);
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the actual address or place of business, such as a website or a mobile app (the declared place of residence may be omitted);
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contact details; and
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details of documentary evidence of professional qualifications if necessary.
Common mistakes
Here are the most common mistakes in registering a business unit, according to the SRS:
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Multiple websites are registered as a single business unit;
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The name “online shop” is stated in addition to the website address;
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The name contains only the words “online shop” etc without a website address;
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A trading platform, not a link to the trader’s website, is registered as a business unit.
