Changes in cash transactions from May 1, 2019
On April 3, 2019, the parliament adopted amendments to the law On Taxes and Duties relating to additional restrictions with regard to cash transactions. According to the aforementioned amendments, from May 3, 2019, taxpayers, including natural persons who are not engaged in an economic activity, are not allowed to perform cash transactions related to the sale and purchase of an immovable property.
The amendments provide a transitional period for transactions with immovable property performed before May 1, 2019. Namely, if a transaction with an immovable property has been concluded before the mentioned date, the conditions of cash restrictions will be applied from January 1, 2020.
Amendments to the law On Personal Income Tax effective from April 16, 2019
On March 21, 2019, the parliament adopted amendments to the law On Personal Income Tax (hereinafter – PIT Law). The amendments to the PIT Law provide a possibility for a PIT payer to determine the monthly non-taxable minimum. This means that by estimating the amount of actual income, the employee can forecast his or her monthly non-taxable minimum which cannot exceed the amount forecast by the State Revenue Service.
In order to apply the monthly non-taxable minimum forecast to the employee, the employee must submit to the employer an application drawn up in written form and both parties must agree on the application of the amount of the non-taxable minimum.
Transitional Provisions of the PIT Law are supplemented with Paragraph 140 which stipulates the extension of the deadline for the payment of the PIT by 1 December 2020 for those taxpayers to whom, based on the annual declaration submitted for 2018 and 2019, have PIT liabilities. This right can be exercised by taxpayers who are not engaged in an economic activities and the income earned during the taxation year conforms to the following characteristics:
- the income has been earned only in Latvia;
- the amount of the income does not exceed EUR 55,000 in 2018 and EUR 62,800 in 2019;
- there is an income wherefore the PIT has been deducted by income payer;
- there is an income to which the annual differentiated non-taxable minimum shall be applied and the benefits specified in the PIT Law.
Receipt lottery to be organised by the State Revenue Service from July 1, 2019
On November 1, 2018, the parliament adopted the Receipt Lottery Law which will enter into force from July 1, 2019. The purpose of this Law is, through the organisation of a receipt game, to promote fair competition and voluntary fulfillment of tax obligations, to combat tax fraud and to encourage customers to demand receipts or payment slips for purchases.
The receipt lottery will start on July 1 this year and it is intended for natural persons. Participation in the receipt lottery can be registered online (www.cekuloterija.lv) by submitting a receipt, payment slip registered within the registers of the State Revenue Service, ticket or another document (hereinafter – the receipt) issued for the goods or services purchased in Latvia. The receipt value must be at least EUR 5.
Winners of the lottery will be announced on a monthly and annual basis. Receipts which corresponds the respective month participate in the lottery organised on a monthly basis. One can register the receipt by the 5th date of the subsequent month, 23:59. In total, 10 receipts drawn in monthly lotteries that were not announced as winners in the respective month will participate in the annual lottery.
Cash prizes are as follows:
for the prize of the year
1 prize: EUR 20,000
The winners will be announced on the website of the State Joint Stock Company “Latvijas Loto”:
- monthly winners – on the second Sunday of the subsequent month; and
- annual winners – on the third Sunday of February of the subsequent year.
In order to receive the prize, the winner must apply for the prize within 30 days following the prize draw and the winner must hold the original of the winning receipt.
Contrary to other prizes, the receipt lottery prizes are not subject to the application of PIT.
Information prepared by Leinonen Latvia, Tax & Legal Advisory