Factsheet for measure
LV-2020-14/618
–
Updated
– measures in Latvia
Direct refund of the overpayment of VAT
PVN pārmaksas atmaksa
Background information
Refund of the overpayment of a value added tax is a measure introduced with the objective to make available additional financial resources to deal with the crisis caused by the COVID-19 virus.
The measure is introduced in Section 6 of the law 'On Measures for the Prevention and Suppression of Threat to the State and Its Consequences Due to the Spread of COVID-19' (adopted on 20 March 2020, valid from 22 March 2020).
Content of measure
Normally, according to Section 109 of the Value Added Tax Law, the State Revenue service carry forward the approved amount of overpaid tax to the next taxation period.
Section 6 of the 'Law On Measures for the Prevention and Suppression of Threat to the State and Its Consequences Due to the Spread of COVID-19' sets forth different procedures for the anticipated refund of overpaid value added tax in the time period from 1 April 2020 to 31 December 2020. During this time period the procedures of refunding laid down in Sections 109 and 110 of the Value Added Tax Law should not be applied.
State Revenue Service has to refund the approved and overpaid amount of value added tax which has been submitted to State Revenue Service after 31 March 2020 within 30 days.
Prior to the refund of the approved and overpaid amount of value added tax, State Revenue Service has to cover the taxes and duties of the taxpayer administered by the State Revenue Service, other payments stipulated by the State and the payments related thereto.
Updates
The following updates to this measure have been made after it came into effect.
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01 January 2021
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Since 1 January 2021 VAT refund system has been updated in the law On Value Added tax based on system introduced due to the pandemic. The State Revenue Service shall refund the approved overpaid tax amount for the taxation period within 30 days after the deadline for submission of the tax return, or the date of submission of the tax return if the tax return is submitted later, or the date of submission of the specified tax return. Section 110 of the law "The right of the State Revenue Service to extend the term for refund of overpaid tax" was excluded.
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10 June 2020
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On 10 June 2020 the new umbrella law “On the Suppression of Consequences of the Spread of COVID-19 Infection” was adopted and took over functions of the initial law “On Measures for the Prevention and Suppression of Threat to the State and Its Consequences Due to the Spread of COVID-19”.
The measure was included in the new law unchanged.
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Use of measure
Until 30 June 2020, the State Revenue Service provided faster refund of the overpaid value added tax (VAT) to 101,816 companies in the total amount of €240,643,900.
Target groups
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Workers
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Businesses
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Citizens
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Does not apply to workers
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Applies to all businesses
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Does not apply to citizens
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Actors and funding
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Actors
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Funding
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National government
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No special funding required
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Social partners
Social partners' role in
designing the measure
and form of involvement:
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Trade unions
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Employers' organisations
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Role
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Consulted
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Consulted
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Form
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Direct consultation outside a formal body
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Direct consultation outside a formal body
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Social partners' role in the
implementation, monitoring and assessment phase:
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Unknown
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Main level of involvement: Unknown
Involvement
Top level social partner organisations – the Latvian Employers’ confederation and the Free Trade Union Confederation of Latvia – on 17 March 2020 has published the 'Statement on support for government action to limit the spread of COVID-19 and reduce the impact of the crisis on Latvian companies and workers'. The social partners emphasized the need for cooperation of government, businesses, workers and citizens to ensure that everything we do helps to address this crisis.
Views and reactions
As far as we know social partners participate in discussions on measures for the prevention and suppression the spread of COVID-19 and on crisis impact on economy. However specific opinions of social partners are not published.
Sources
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09 April 2020: Law On Measures for the Prevention and Suppression of Threat to the State and Its Consequences Due to the Spread of COVID-19
(likumi.lv)
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09 April 2020: State Revenue Service informative page on COVID-19
(www.vid.gov.lv)
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13 July 2020: During the period of downtime benefits, the SRS has paid downtime benefits in the amount of more than 53 million euros to almost 55 thousand people.
(www.vid.gov.lv)
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01 July 2021: Law on value added tax 01.07.2021
(likumi.lv)
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28 September 2021: Law on the Suppression of Consequences of the Spread of COVID-19 Infection (edition 28 September 2021)
(likumi.lv)
