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31.07.2019

Single Tax Account

The August 2019 issue of iFinanses published an article by Ingūna Ābele, head of Tax Practice, and Kristers Zālītis, junior associate, both from PRIMUS DERLING, on planned changes in tax payments.

Starting from 2021, all tax payments will be made to the single tax account (the Account). Exception will be real estate tax administered by the municipalities and the vehicle operation tax and company car tax administered by the CSDD.
All other taxes, penalties and fines will be credited to the Account. In addition, certain fees and other payments will also be credited to the Account.
In the future, the taxpayer will be able to calculate the total amount of taxes to be paid and make one transfer to the Account for all taxes due in the month, but will also be able to pay in instalments.
However, not all payments to the Account will be made by the same date. You will need to pay attention to the time limit specified in the specific tax law or decision.

Administration Procedure for Payments to the Account
Payments made by taxpayers to the Account will be administered automatically based on certain principles contained in the laws and regulations.

  1. The basic principle is that the payment received in the Account will first be used to cover the older payment obligations, which will be determined based on the deadline for submission of tax returns or relevant payment thereunder – if the taxpayer has any tax debt, the contribution paid will first cover such debt. First, the principal debt, then the late payment, then the fine for the tax in question is covered. This principle also applies to cases where the tax return for the previous months is adjusted and an increase occurs – the older payment obligation will be covered first.
  2. There will be a single deadline for multiple payments of taxes (and other obligations) to be made to the Account. In such a situation, the payment made to the Account will be channelled on the first-come first-served basis, according to the type of tax.

Payment obligation in priority order:

  • Mandatory social security contributions (VSAOI)
  • Personal income tax (IIN)
  • State fee of business risk
  • Micro-enterprise tax
  • Patent fees
  • Natural resource tax (in a specific sequence, depending on the taxable object)
  • Import duty
  • Import tariffs for agricultural products
  • Anti-dumping duties
  • Countervailing duties
  • Export duty and other equivalent charges
  • VAT collected when goods are released for free circulation
  • Lottery tax
  • Gambling tax
  • Excise duty (in a specific sequence, depending on excise goods)
  • CIT
  • VAT (in a specific sequence, depending on the taxable object)

If the company does not cover all of its tax liabilities, a VAT debt will be incurred.

Impact of the new system on the taxpayer and potential problems.
This system reduces the risk that the tax will be credited to the wrong tax account. Downside – a taxpayer will not be able to choose the order in which his tax liability will be covered, for example, based on the fact that a certain tax has smaller fine, etc.