The sweet manufacturer “Skrīveru saldumi” has come to the attention of the State Revenue Service (VID). The company has a tax debt of several tens of thousands of euros. In order to ensure that the debt does not increase, VID has forbidden the company to register any new commercial pledges. The company has already agreed with the State Revenue Service on the debt repayment schedule, reported LSM's Latvian service on June 26.
As of the beginning of June 2019, “Skrīveru saldumi” has a debt of more than 75 000 euros. “It's a big number, I agree. But if we look at the total amount of taxes we pay per year, which is 600 thousand, then on average it makes up one month's tax. The number is great, but it's one month,” noted Oskars Brediks, board member of “Skrīveru saldumi”.
The sweet manufacturer “Skrīveru saldumi” has come to the attention of the State Revenue Service (VID). The company has a tax debt of several tens of thousands of euros. In order to ensure that the debt does not increase, VID has forbidden the company to register any new commercial pledges. The company has already agreed with the State Revenue Service on the debt repayment schedule, reported LSM's Latvian service on June 26.
As of the beginning of June 2019, “Skrīveru saldumi” has a debt of more than 75 000 euros. “It's a big number, I agree. But if we look at the total amount of taxes we pay per year, which is 600 thousand, then on average it makes up one month's tax. The number is great, but it's one month,” noted Oskars Brediks, board member of “Skrīveru saldumi”.
Although the company had a turnover of 2,5 million euros in the previous financial year, which ended in May 2018, the company did suffer losses. The situation had improved at present, said the manager of the company, therefore the financial collateral requested by the VID has come unexpectedly and roused the concerns of the company's cooperation partners.
“Our long-time dairy supplier called and said you can't come to us after milk – you have a problem. This is our long-time partner, we found a compromise, and they are considerate. But we hope very much that our other partners will also be considerate and won't perceive this as something extraordinary, as it is simply an extension for tax payment, what other companies in Latvia do to even out the cash flow,” said Brediks
The VID has issued a prohibition to “Skrīveru saldumi” to register new or amend pre-existing commercial pledges. This means that the company is currently prevented from taking new loans.
“The collateral doesn't mean debt recovery, definitely. Everything is fine with “Skrīveru saldumi”. The collateral is our way of making sure that specific obligations are fulfilled. And it's a way for us to agree with the companies on payment arrangements and schedules, even in situations where certain indicators of the company's performance are not as favorable as they would like them to be” explained Santa Garanča, director of the VID Tax Debt Collection Board.
Collateral requirements can be submitted to the Register of Enterprises not only by VID, but also by bailiffs, the police, and other institutions. This year, 1800 collateral requests have already been registered.
“The collateral is often applied when there's a claim, or when specific claim have not been met, so it's these claimants, who are bailiffs, that start the case, or it's the VID. For this reason the collateral is applied, and it can be cancelled if the company in question is cooperating with the collateral provider and fulfils its obligation,” explained Guna Paidere, the Chief State Notary of the Register of Enterprises.
The State Revenue Service states that companies are usually given one or three years to fully repay the debt or at least pay most of it. The prohibition to register new commercial pledges is then lifted.
