On Thursday, 26 July, the Saeima in the third and final reading adopted the Law on Tax Support Measure with a view to relieve the tax debt burden incurred by taxpayers as a result of the economic crisis. The Law defines a range of taxpayers eligible to apply for the support measure, namely, companies that have incurred tax debts before 1 September 2011.

The Law on Tax Support Measure stipulates that the previous 18-month term for discharging a tax debt will be increased to up to 60 months, depending on the amount of tax debt.

“The Law provides that taxpayers who pay the principal amount of tax debt and at least 10% of applicable penalties by a set date will be offered an opportunity to have the past due fees and penalties cancelled in the amount of up to 90%,” said Jānis Reirs, Chairman of the Budget and Finance (Taxation) Committee of the Saeima, which was responsible for advancing the Law. He added that companies undergoing out-of-court legal protection proceedings or legal protection proceedings will also be eligible to apply for this measure.

“The Law has been drafted and coordinated with the European Commission, which is why the adoption has been delayed by a year. Therefore, we moved the deadline for eligible tax debts from 1 September 2010 to 1 September 2011,” said Reirs.

The tax support measure will apply to personal income tax, corporate income tax, value added tax, excise tax, customs tax, mandatory social contributions, natural resources tax and real estate tax debts.

In order to benefit from the tax support measure, tax debtors will have to comply with the debt repayment schedule elaborated by the tax administration and make timely payments. In the event of failure to comply with the payment schedule, recovery of the past due tax payments will be renewed.

Saeima Press service