On Tuesday, 24 November, Latvian Parliament approved amendments to the Value Added Tax (VAT) Law that provide for simplifying VAT usage and reducing VAT to 5% for fresh fruits, berries and vegetables in the final reading.
Finance Ministry previously explained that the goal of amendments is clarifying VAT regulations to:
- simplify application of VAT;
- reduce administrative burden and costs;
- prevent possible interpretations;
- coordinate VAT regulations with other legislative tasks;
- promote the operation of VAT system by returning overpaid VAT back to taxpayers.
Amendments to the law preserve reduced 5% VAT for fresh fruits, berries and vegetables until 31 December 2023 to assist with development of agriculture sectors, reduce grey economy, increase the competitiveness of legally working businesses, as well as assist with consumption of fresh fruits, berries and vegetables in the country.
To reduce the administrative burden for taxpayers and make costs more efficient for the State Revenue Service (SRS), a single method is to be established for VAT taxpayers to be reported the decision on their registration in SRS VAT payers register. Law amendments are part of the legislative drafts accompanying the 2021 budget law.
Information source: Cabinet of Ministers, Baltic News Network