Latvia : Private VAT rulings in relation to cross-border situations

A number of EU Member States, including Latvia, have agreed within the EU VAT forum to commence a test case process for private VAT rulings relating to cross border situations.

Taxable persons, who are planning a cross-border transaction to one or more of the participating EU Member States, may submit their request for a private VAT treatment of the anticipated transactions in the participating Member State where they are registered for VAT purposes.

A complete list of Member States who decided to participate in this project is as follows: Belgium, Estonia, Spain, France, Cyprus, Lithuania, Latvia, Malta, Hungary, Netherlands, Portugal, Slovenia and the United Kingdom.

If two or more companies are involved in the transaction, only one of them should submit the request acting on behalf of the remaining companies.

Following this test case procedure, the cross-border ruling can only be requested if the anticipated transactions are complex and have a so called “cross-border aspect”, which is defined by at least two or more Member States being involved in the respective transaction.

Each request must always be introduced in line with the conditions governing national VAT rulings in the Member State where the request was submitted and it should also be accompanied by translation into the official languages of the other Member States involved.

The taxable person submitting a request for a cross-border ruling must accept that the provided data can be shared with Tax authorities of the Member States involved. Consultations between the competent authorities of the involved Member States will, however, only take place if it is explicitly requested by the taxable person.

The Member States concerned will examine the request and come to a decision on the VAT treatment of the corresponding transactions as soon as possible.

This test case on private VAT rulings in relation to cross-border transactions starts on 1 June 2013 and it should end on 31 December 2013. It may, however, be suspended or stopped earlier or even extended further, depending on its overall development and success.

This project should generally help to improve VAT governance in the EU, as well as enhance an effective fight against tax fraud in the EU.

Valters Gencs

Tax Attorney & Founding Partner

Gencs Vlaters Law Firm, Riga

Email: valters.gencs@gencs.eu Tel: +371 67 24 00 90