One of the tasks of the Register of Enterprises of the Republic of Latvia (hereinafter – the Register) is to provide information to the State Revenue Service (hereinafter – the SRS) about applications received for making entries or registering (adding to the file) documents in the registers maintained by the Register. The cases in which the Register is obliged to transmit information to the SRS about received applications are specified in Section 4.16, Paragraph One of the Law On the Enterprise Register of the Republic of Latvia. Namely, in accordance with the aforementioned provision, the Register shall send the SRS information concerning applications received for making entries or registering (adding to the file) documents in the journal of the Register of Enterprises, the Commercial Register, the Register of European Economic Interest Groupings, the Register of Representative Offices, and the Register of Associations and Foundations, if:

• at the legal address specified in the application, where the entry is to be made, several legal entities, branches, or representative offices of foreign merchants or organizations are already registered in these registers;
• a member of the executive board, member with the right of representation, another official with the right of representation, or procurator specified in the application holds such a position in several legal entities registered in these registers;
• one of the founders of a capital company is already a shareholder in several capital companies, except when one of the founders is a public entity within the meaning of the State Administration Structure Law;
• the sole founder or one of the founders of a legal entity registered in these registers is a person who has been the sole founder or one of the founders in several legal entities registered in these registers within a year from the submission of the application.

The information is compared with the data entered in the registers maintained by the Register, or with information about commercial companies and their branches, branches of foreign merchants, representative offices and representatives of foreign merchants and organizations, individual (family) undertakings, farms or fishing undertakings, cooperative societies, European Economic Interest Groupings and their branches, European companies, European cooperative societies, associations, trade unions, and foundations.

Additionally, in order to limit the activity of such providers of services of establishing and ensuring the operations of a legal arrangement and the activity of independent providers of legal services with similar responsibilities (hereinafter – legal service providers), who have not submitted to the SRS a statement on the type of their economic activity, the Register shall send to the SRS the information referred to in Clauses 2, 3, and 4 of Paragraph One of this section, and shall also provide information on persons who have signed applications submitted to the Register on the basis of contractual authorization.

The procedure for the exchange of such information between the Register and the SRS, as well as the precise criteria for identifying the cases specified in the above-mentioned clauses, are laid down in an interinstitutional agreement concluded between the Register and the SRS. This agreement is of restricted accessibility, and the applicant is not entitled to get acquianted with it.

Simultaneously with sending the information to the SRS, a state notary of the Register extends the decision-making period by 10 working days, as, pursuant to Section 18, Paragraph One, Clause 26 of the Law On Taxes and Fees, the SRS provides its opinion on applications received by the Register within 10 working days. The Register may also extend the decision-making period for a time not exceeding three months from the date of receipt of the application, if the SRS needs to carry out additional checks to verify that the persons referred to in Clauses 2, 3, and 4 are not acting as legal service providers who have not submitted a statement to the SRS regarding their type of economic activity.

If an opinion is received from the SRS concerning tax risks of a legal entity or activities carried out by the persons referred to in Clauses 2, 3, and 4 as legal service providers who have not submitted a statement to the SRS on their type of economic activity, a state notary of the Register shall, on the basis of Section 4.16, Paragraph Seven of the Law On the Enterprise Register of the Republic of Latvia, adopt a decision to refuse registration (addition to the file) of documents or making of an entry in the registers maintained by the Register. In such cases, the state fee shall not be refunded.

Considering the above mentioned, it should be emphasized that, firstly, upon receiving an SRS opinion on identified tax risks, the state notary of the Register must adopt a mandatory administrative act—refuse registration of the requested changes, as the Register is not entitled to assess the content of the opinion provided by the SRS. One of the circumstances assessed by the SRS when preparing its opinion is whether the proposed official has outstanding tax debts. Therefore, before appointing an official, it is advisable to verify that the person does not have tax debts, which can be done here: https://www6.vid.gov.lv/NPAR 

Secondly, the SRS does not provide the Register with the full opinion, but only a part thereof, the content of which is also indicated in the decision of the state notary of the Register refusing registration of the requested changes. If the applicant disagrees with the opinion provided by the SRS, the applicant must contact the SRS. If the tax risks identified by the SRS are eliminated and the Register receives a new opinion from the SRS stating that the previously identified tax risks no longer exist, the Register will register the requested changes, provided that the state fee prescribed by regulatory enactments is paid repeatedly. A legal entity may also appoint other officials, or, if several officials have been proposed and tax risks have been identified only for one of them, submit for registration the remaining officials for whom no opinion on tax risks has been provided.