Revenue Service and Electrical Material Wholesalers Association sign agreement on cooperation in tax administration matters and fostering fair competition
April 4, 2019 at 2:57 pm
On April 4 this year, the State Revenue Service (SRS) and Latvian Electrical Material Wholesalers’ Association (LEVA) signed an agreement on cooperation in fostering fair competition and tax administration with a view to promoting a common understanding of taxation of business operations in the industry.
The cooperation agreement was signed by the SRS Director General Ieva Jaunzema and the LEVA Association’s Chairman of the Board Kristaps Bleija. The purpose of the agreement is to reduce tax evasion by those working in the industry, thereby reducing the scope of unfair competition in the sector. The agreement is also expected to improve information exchange between the SRS and the Association.
By signing the agreement, the Association undertakes to implement all measures aimed at fulfilling the duties of the members of the Association and providing information on tax evasion and the methods used by individual businessmen to evade taxes. The Association also undertakes to acquaint its members with information provided by the SRS about the latest practices in the application of legal requirements and the Service’s latest services and to inform the SRS about its activities in bringing order to the industry and promoting fair competition.
Based on information provided by the Association, the SRS undertakes to develop and use effective tax administration methods to fulfill the purpose of the agreement. Information that the Administration provides on businesses evading taxes will be used in the tax administration process, considering that this information has a high degree of credibility. The SRS undertakes to inform the Association about its activities, regulatory enactments aimed at straightening out the industry of wholesale of electrical goods, as well as about the practice of the SRS in the application of
legislation and the latest services. The SRS also undertakes to prepare and provide reviews of the members of the Association upon the Association’s request.
The agreement also provides for regular meetings and discussions between representatives of both sides about the latest developments in the application of tax legislation and the most important issues of interest to the members of the Association. The agreement came into force the moment it was signed and will be valid indefinitely.
During the meeting, the two sides discussed methods businessmen used in the construction sector and wholesale of electrical materials to avoid taxes. Ieva Jaunzema welcomed the reverse VAT methodology employed by the Association as well as the Association’s overall support for the fight against shadow economy. The SRS also approves of the Association’s reasoning for the European Commission, which intends to keep the reverse VAT methodology for certain groups of construction product groups. A joint letter on the methodology has been sent to the SRS by the Latvian Association of Electrical Power Engineering and Energy Constructors, the Association of Manufacturers of Building Materials, and the Latvian Electrical Material Wholesalers’ Association.
Latvian Electrical Material Wholesalers’ Association (LEVA) was founded on April 13, 2018 to unite distributors of electrical materials across Latvia, as well as manufacturers in other EU countries and their representatives in Latvia. Already at this time, the Association has developed successful cooperation with several public institutions, partner associations in Estonia and Lithuania, and with educational, scientific, research and other institutions to pursue joint interests of the members of the Association, foster professional development of the electrical materials industry, and contribute to the development of a sustainable business environment.
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