Financial Services, Latvia, Legislation, Markets and Companies, Taxation

Business organizations and Justice Ministry had voiced objections against the amendments, claiming that they would distort the business environment. The Finance Ministry, however, insists that the amendments would only apply to dishonest businessmen – and that it expects that the additional budget revenue thanks to the new provision in the law will total EUR 7 million next year.

According to the amendments, the State Revenue Service will have the right to start a process over taxes that a legal entity fails to pay on time, and demand that the unpaid taxes are compensated by persons who were members of the board during the period when taxes were not paid, if the company meets a set of several criteria. If the company has several board members, they will have to equally contribute to compensate for the unpaid taxes.

The Justice Ministry, Latvian Employers' Confederation, Latvian Chamber of Commerce and Industry, and the Revenue Service's Director Inara Petersone Bicevska all strongly objected to the amendments, saying that the authorities should efficiently investigate criminal cases against tax evaders, and within reasonable periods of time, to hold responsible those board members who are guilty of tax evasion by the given company, instead of threatening the business environment – which is what the new provision does.