The Ministry also states that this requirement will not apply to purchases in retail stores, accordingly, the store will not have to report anything additionally if a person buys an expensive TV or computer in cash. Likewise, paying for, for example, utility services will not be the focus of such research interest.
By implementing the measures of the Shadow Economy Limitation Plan, the FM has developed and on August 20 submitted for public discussion the draft law “Amendments to the Law “On Taxes and Fees””. The aim of the initiative is to increase the transparency of cash flows by focusing attention on the regular use of large amounts of cash, which would help detect cash transactions of illegal origin.
FM notes that despite the fact that the proportion of cashless payments is constantly increasing, many people still use cash as a convenient way of payment, which is not inherently bad or wrong. At the same time, cash is also often used as a tool for shadow economy activities.
The collected data show that cash deposits in ATMs in Latvia in 2023 amounted to more than 2.1 billion euros, and costs – more than 4.6 billion euros.
The greater the circulation of cash in the economy as a whole, the easier it is to hide the manifestations of the shadow economy in the circulation of legal cash. Therefore, the goal of the Ministry of Finance is to gain greater transparency about those cash contributions and costs that are higher than the average, in order to be able to identify cash transactions of illegal origin in the overall flow, the ministry explains.
Also, the planned amendments envisage supplementing the information already reported by credit institutions and payment service providers to the SRS on the turnover of accounts of natural persons, allocating a separate item on cash transactions.
The SRS is currently receiving information on natural persons whose account turnover for the previous year exceeds EUR 15,000. The planned amendments provide that credit institutions and payment service providers will be obliged to provide additional information to the SRS if the total amount of cash transferred in the previous year is 7,000 euros or more.
The FM explains that such information reaching the SRS does not automatically mean that the person will come under special supervision. This information will be evaluated in conjunction with other information available to the SRS. Individuals will be approached in cases where they have really significant discrepancies between income and expenses. Finding such discrepancies does not always mean that a person avoids paying taxes. It may happen that non-taxable income has not been declared, then SRS will help the person to understand and sort out the situation.
On the other hand, for legal entities whose annual turnover is over EUR 50,000 per year, the amendments to the law stipulate the obligation to provide customers with the opportunity to pay for services and transactions in retail also in cashless money, if the customer wants to pay in this way.
The regulation currently in force stipulates that taxpayers make only cashless payments in wholesale, including with payment cards. According to the Law “On Taxes and Fees”, the sale of purchased goods in one’s own name to an economic activity performer for resale, production or ensuring one’s own activity is considered wholesale.
Thus, the planned regulation will affect service providers and retailers, who, in addition to the already existing cash payments, will have to provide the opportunity for customers to pay in cashless mode as well, according to the FM.
2024-08-28 23:56:23