Taxpayer rating is available to anyone interested in the SRS Public Database

As of today, February 28, 2024, on the website of the State Revenue Service, anyone interested can view the tax payment rating of each Latvian company. The rating is a evaluation by the State Revenue Service of the company's compliance with tax obligations and has an informative nature. The rating facilitates understanding of the company's situation for its business partners, clients, and other stakeholders.

Baiba Šmite-Roķe, Director-General of the State Revenue Service, says, "We have created the taxpayer rating to strengthen public understanding and demand for fair business, motivate entrepreneurs to work honestly, and practically help understand how to do it. This very practical tool was developed using data analysis and technology capabilities provided by the State Revenue Service. This is the beginning of a more open collaboration between entrepreneurs and the State Revenue Service, which we can further improve and strengthen."

Ināra Pētersone, Vice President of the Latvian Employers' Confederation and Executive Director of the Health Care Employers' Association, adds, "The taxpayer cares about their reputation, and the publicly available rating created by the State Revenue Service will undoubtedly help both the entrepreneur understand their position in cooperation with the State Revenue Service and compare it with market participants, and to choose a business partner more confidently."

Zlata Elksniņa-Zaščirinska, Chairperson of the Foreign Investors' Council in Latvia (FICIL), appreciates the efforts put into creating the taxpayer rating system by the State Revenue Service, emphasizing its role in promoting transparency. The system allows companies to easily obtain data on the tax compliance of their business partners, which is crucial for evaluating potential partners.

The company's tax payment rating, expressed with a letter, can now be viewed on the State Revenue Service website in the public database by entering the company's name and registration number.

Since the end of 2023, companies themselves have access to their rating and the detailed criteria that form it in their electronic declaration system (EDS) profile. The rating indicators serve as a roadmap for improvement in tax payment, providing information for companies to understand areas for improvement. This detailed information, visible only in the EDS, can be voluntarily shared by companies with their business partners and other stakeholders.

Healthy tax payment discipline and a good rating offer advantages in collaboration with the state. Companies with an A rating receive comprehensive support and a wide range of benefits, while control measures are planned only for companies with potential risks. The list of advantages available to A-rated companies can be found on the State Revenue Service website.

The rating is based on six sets of data: registration data, timely submission of declarations and reports, tax payment, applicable fines, the level of remuneration in the company (including a comparison with other professionals in the specific industry), and information indicating violations.

In summary, all companies have been assigned one of five rating levels:

• A-rated companies fulfill their obligations with the state on time and completely, with no significant risk of violations.
• B-rated companies generally fulfill their obligations, but there is room for improvement in the timely submission of more accurate declarations, timely payment of taxes, and industry-average labor compensation, allowing them to move up to a higher rating level.
• C-rated companies have been excluded from the VAT payer register or the State Revenue Service has decided to suspend their economic activities due to violations. The ability of such companies to fulfill their business obligations is critically evaluated.
• N-rated companies are inactive taxpayers, not conducting economic activities according to their self-declared information.
• J-rated companies are newly registered taxpayers, established within the last six months. They have not yet proven themselves with actions, so they are not evaluated. However, every new beginning that is being formed responsibly is welcomed.

As of February 1, 2024, 24,355 companies, or 18% of all Latvian companies, have received an A rating, constituting 87% of the state budget revenue. 60,013 companies, or 44%, have a B rating, while 8,727, or 6%, have a C rating. 4,212 companies, or 3%, were newly established, and 39,342, or 29%, are inactive taxpayers.

The establishment of the rating system was envisaged by the amendments to the "Law on Taxes and Duties" adopted by the Saeima on June 8, 2023. The rating system is part of a broader set of changes planned by the EU Recovery Fund reforms and investment projects specifically aimed at combating the shadow economy. Among other significant activities within these measures, improvements have been made to the State Revenue Service's working methodology, including the development of a handbook for reducing undeclared income and adjusting it to the current situation with the impact of COVID-19, as well as creating a more precise business typology for risk assessment.

For questions about the rating system, companies can contact the State Revenue Service through the usual channels, including the "Correspondence with the State Revenue Service" section in the EDS, or via a dedicated consultation phone line at 67120022. Both received questions and suggestions from companies are essential for the State Revenue Service's work in planning further improvements and development of the rating system.

Together, let's build an even better Latvia!

Information from the State Revenue Service (VID)

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