UPDATE ON TAX CONTROL PRACTICE IN LATVIA IN THE SCOPE OF VAT DIRECTIVE 2006/112/EC

摘要

Topicality of the problem under discussion is related to a complicated situation arising between a taxpayer and State Revenue Service (SRS) of Latvia in connection with application of law, when settling disputes arising in the process of tax administration. There are topical problems of tax audit in application of particular laws on value added tax (VAT) analysed in the research. The goal of this research is to analyse how evidence during a tax audit is gathered in the Latvian tax administration and on what basis considerations are made, which become conclusions for a tax audit carried out later on, and to draft recommendations for improvement of the current situation on the basis of findings. The article summarizes information regarding assessment of impartiality of the audit evidence obtained by the SRS in accordance with the criteria of eligibility and sufficiency. From the point of view of emerged practice of auditors, interpretation of specific provisions of tax laws is also carried out that affects exercise of the legitimate rights of taxpayers in disputes with the SRS significantly, as well as established practice of the Supreme Court (SC) of Latvia and latest considerations in the EU judicature. The study resulted in identification of the key problems in tax auditing and the conclusion made that the methodical practice of the SRS must be reviewed due to incompliance with the EU case law, which leads to incompliance with the general principles of law in mutual relations between the state and taxpayers.