Of the 26 Latvian restaurants that were acclaimed by world-famous Michelin Guide last week, five have tax debts, according to information from LETA.
According to information published by the State Revenue Service (VID), as of the 24th of November the owner of Tauro restaurant – Tauro LLC – had a tax debt of EUR 47 108.
According to information from Firmas.lv, last year Tauro operated with turnover of EUR 332 935 and losses of EUR 514 703. The company indirectly owned by billionaire Jurijs Šeflers has been operating with losses since 2010. In 2022 Tauro paid EUR 168 630 in taxes. The average number of employed people in this company was 16.
Binvest LLC, which manages both Mullberry confectionery company and Chef’s Corner restaurant added to Michelin Selected Restaurants guide, had a tax debt of EUR 35 754 as of the 24th of November.
Zetop LLC, which manages Whitehouse restaurant (also on Michelin Selected Restaurants guide), had a tax debt of EUR 61 448.
Binvest operated with a turnover of EUR 840 932 and losses of EUR 160 525 last year. The company was registered in 2018 with base capital of EUR 2 800. Binvest’s sole owner is Bulgaria-based Armenian Armen Mkrtchan, who owns 5.3% of Zetop shares, and Armenian citizen Goar Mkrtchan, who owns 94.7%.
In 2022 Binvest paid the state EUR 191 440 in taxes. The average number of employees in the company was 21.
Last year Zetop operated with turnover of EUR 1.026 million and losses of EUR 346 337. The company was registered in 2019 with base capital of EUR 52 800. In 2022 Zetop paid EUR 275 960 in taxes. The company had 29 employees.
On Tērbatas Street 2, where Whitehouse is located, Armen Mkrtchan has two other catering companies registered, including Food&More LLC and Restin LLC. As of the 24th of November their tax debts were EUR 13 971 and EUR 34 186 respectively. Additionally, VID applied a restriction on Food&More on the registration, renewal and amendment of a commercial pledge.
Apetite36 LLC, meanwhile, had a tax debt of EUR 442 036 on the 24th of November. The company also had a tax debt of EUR 212 237, which was applied with a decision on the voluntary execution of overdue tax payments.
Information from Firmas.lv indicates that Apetite36 operated with turnover of EUR 3.089 million and losses of EUR 413 330. The company was registered in 2019 with base capital of EUR 2 800. Apetite36 co-owners include Lauris Aleksejevs (80%) and Jānis Kārkliņš (20%). In 2022 Apetite36 paid the state budget EUR 612 360 in taxes and employed an average of 100 people.
Last December Apetite36 was applied with a prohibition by VID on the registration, renewal and amendment of a commercial pledge.
Apetite36 also owns 50% of shares in Lauris Restaurant Service. This company had a tax debt of EUR 148 145 in November, according to information published by VID.
The manager of KEST restaurant – Jansons un partneri LLC – had a tax debt of EUR 13 931 in November, as well as debt amount of EUR 14 802 under the decision on voluntary execution of overdue tax payments.
Last year Jansons un partneri operated with turnover of EUR 662 586 and losses of EUR 149 274, according to information from Firmas.lv. The company was registered in 2017 with a base capital of EUR 3 000. Jansons un partneri is owned by Gundars Skudriņš (80%) and Māris Jansons (20%). In 2022 Jansons un partneri paid taxes in the amount of EUR 159 380, and employed an average of 14 people.
The company is under VID order, prohibiting the company from registering, renewing and amending of its commercial pledge.
Commenting on the situation, Association of Hotels and Restaurants of Latvia (LVRA) board chairman Andris Kalniņš told LETA that, when looking at these and other businesses’ tax debts in this sector, it can be concluded that some of them still have tax debts left from the Covid-19 pandemic, as well as fresh tax debts, which is something considered normal for the catering and hotel sector during the off-season (winter) period.
“The hospitality industry has a strong seasonality and, as a result, it has to be concluded that even the catering places acclaimed by the Michelin guide are forced to work in the off-season with losses and late payments,” comments Kalniņš.
He also mentioned that in Western Europe such a situation would be unimaginable at the very least because in most of the European Union public catering services are under reduced VAT. “However, because of the government’s failure to understand the situation and necessary measures to support the sector, we are where we are,” added the head of LVRA.
On top of that, Kalniņš also stressed that for a long time LVRA has pointed toward various ongoing problems in the sector. During the Covid-19 pandemic the catering industry accumulated tax debts, which reached EUR 44.2 million in 2023, which is the biggest debt versus turnover in comparison with other sectors of the national economy in Latvia.
After the pandemic the hospitality sector was heavily impacted by the geopolitical situation in the world.
According to Kalniņš, the tourism flow in Latvia recovered more slowly when compared to other EU member states.
“Traditionally the catering sector has very low profitability. However, considering all the difficulties, the shortage of labour force and growing costs, businessmen have had to operate at a loss and cover growing costs at the expense of their possible profits, because people’s purchasing power is down significantly,” admits the head of LVRA.
Kalniņš also said that the LVRA recognizes that the industry has a grey economy, and for several years the association has drawn the attention of the government and responsible authorities to it, as the organisation categorically does not support tax evasion. He also added that the missed tax payments do not indicate a business is in a grey economy. However, when compared to, for example, mandatory state social insurance contributions per worker between businesses and the average in the sector, it is possible to gain an approximate picture of a company’s diligence in paying taxes.
LETA previously reported that Michelin star of quality was granted to Riga restaurant Max Cekot Kitchen. The Michelin Selected Restaurants guide now includes Latvian restaurants like: Pavāru māja, Tauro, Zoltners, Mo, 3 pavāri, Whitehouse, 36.līnija, John, COD, Le Dome, Chef’s Corner, Barents Coctails & Seafood, Barents, Aqua Luna, Entresol, Ferma, Neiburgs, Tails, H.E.Vanadziņš, Akustika, KEST and Riviera.
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