As of Monday, 1 August, honest taxpayers who face financial difficulties for reasons outside their control have the option to request from the State Revenue Service (VID) a five-year tax payment term extension.
This option is provided by amendments passed for the Law on Taxes and Fees to reduce the consequences from Covid-19 crisis and Russian-Ukrainian war, as BNN was told by VID.
In addition to existing regulations, which provide he option for taxpayers to request a repeated six-month tax payment term extension, which is a standing solution for cases when business activities are significantly impacted by forces outside their control.
Similarly how it is now, tax payment term extension in general cases, as well as repeated tax repayment term extension, will be applied with late payment penalty of 0.0125% for every missed day.
VID Electronic Declaration System (EDS) provides a special application form. In it, users have to explain the reason for tax payment term extension and list specific reasons/consequences that make it difficult to meet normal tax payment terms.
The application for tax payment term extensions needs to be submitted before the end of the existing tax payment term.
To decide on tax payment term extension, VID needs to evaluate if the taxpayer’s actual financial status warrants an extension. Cooperation with the tax administration is also an important factor, including tax payment history, previous extensions and income declarations, as well as the existence of any penalties applied during tax audits.
If the taxpayer does not follow conditions of the tax payment term’s extension, VID has the right to cancel the extension.
Latvian State Revenue Service allows for extending tax payment terms to five years
