On June 30, 2023, a law came into force in Latvia simplifying tax control and audit procedures. The main goal of the changes is to simplify and optimize the process of checking taxpayers, as well as to increase trust and cooperation between them and Valsts ieņēmumu dienests (VID), the Latvian State Revenue Service. Ultimately, four types of tax audits should be replaced by just one. And voluntary payment of taxes is aimed at reducing penalties.
A new type of audit involves the control by the tax service of only specific inconsistencies, as well as obtaining explanations from the entrepreneur. The taxpayer is given the opportunity to correct the discrepancy.
In case of non-compliance, payment is made in the form of a tax control invoice, which includes unpaid tax and late fees.
After tax control, the penalty is usually not applied. The exception is illegal manipulations with cash registers. In this case, only the fine is included in the bill.
All payments according to the invoice issued by the tax authorities: tax, reduced delay and interest must be paid to the state budget within a year from the date of conclusion of the contract. But at the same time, the taxpayer is obliged to pay monthly contributions proportional to the total amount.
The exception is residents (individuals) who do not carry out economic activities – they must make these payments within two years, monthly paying a proportional part of the total amount.