On Wednesday, June 16, the Saeima adopted amendments to the Law on Taxes and Duties that provide for the introduction of business income account in order to simplify the payment of taxes.

A simplified tax payment option is envisaged as a voluntary option for taxpayers to use a special business income account for the purpose of taxation.

The business income account is intended to calculate, withhold and file tax payments, and transfer them to the single tax account.

Under the simplified solution, the statutory tax declarations and reports will no longer have to be submitted, and the taxable person will not have to calculate and manually pay the relevant taxes.

Taxpayers will be able to open the business income account, which is different from their primary bank account, at credit institutions that offer such a service to its customers. A single business income account may be used for the application of different tax regimes. It will be possible to change the account within the same or another credit institution, ensuring continuity of the simplified solution.

The amendments determine the conditions of use of the simplified tax payment solution, the procedure for launching, terminating, suspending or modifying of operations, as well as cases when the State Revenue Service (SRS) may refuse the use of the new solution.

According to the explanatory note, the simplified tax-paying option will help to incentivise the payment of taxes, reduce the administrative burden, reduce shadow economy and create a modern tax administration tool based on the latest technologies, thus facilitating the development of small businesses.

The new solution will be managed by the SRS in cooperation with credit institutions, and the taxpayers will be able to apply for the simplified solution by submitting an application to the SRS electronic declaration system.

According to the Ministry of Finance, the implementation of the new system and changes to the existing SRS information systems require 800 thousand euros.

Furthermore, the Saeima adopted in the final reading related amendments to the Micro‑enterprise Tax Law, the Financial Stability Fee Law, and the Credit Institution Law.

Saeima Press Service