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An overview from COBALT, Taxand Latvia
The Administrative Regional Court has upheld Bauer Spezialtiefbau GmbH’s entitlement to a VAT refund of EUR 143,844, dismissing the Latvian State Revenue Service’s appeal.
The judgment confirms that a VAT refund cannot be refused solely on the assumption that a foreign business carried out taxable activities in Latvia. Instead, the tax authority must demonstrate, with supporting evidence, that the taxpayer itself undertook taxable transactions in Latvia. The decision also clarifies the distinction between a permanent establishment for corporate income tax purposes and a fixed establishment for VAT purposes.
Our Latvian member firm, COBALT explores the significance of the judgment and its implications, which you can read here.
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