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On Compliance of Section 34 (1) of the Law “On Taxes and Duties, insofar it Envisages Calculation and Collection from the Taxpayer a Fine in the Amount of 100 Per Cent of the Underpaid Tax Due to the Budget, with Article 105 of the Satversme of the Republic of Latvia

The Constitutional Court ruled:

1. To recognise Section 34(1) of the law “On Taxes and Duties”, insofar as it, without an individual assessment, imposes a fine in the amount of 100 percent of the tax payable to the budget for engaging in economic activity after registering as a performer of economic activity but without registering as a payer of a particular tax, as being incompatible with the first three sentences of Article 105 of the Constitution of the Republic of Latvia.

2. In respect of Jānis Pīlāts and those taxpayers who have initiated and continue the process of protecting their fundamental rights using general legal remedies, to recognise Section 34(1) of the law “On Taxes and Duties”, insofar as it, without an individual assessment, imposes a fine in the amount of 100 percent of the tax payable to the budget for engaging in economic activity after registering as a performer of economic activity but without registering as a payer of a particular tax, as being incompatible with the first three sentences of Article 105 of the Constitution of the Republic of Latvia and void as from the moment when the infringement of their fundamental rights occurred.

3. To recognise Section 34(1) of the law “On Taxes and Duties”, insofar as it, without an individual assessment, imposes a fine in the amount of 100 percent of the tax payable to the budget for a failure to submit, within 30 days after the deadline set by the tax authority, tax declarations specified in tax laws, as well as the business and accounting records requested by the tax authority, without which the tax administration officers (employees) are unable to determine the amount of tax liability, as being compatible with the first three sentences of Article 105 of the Constitution of the Republic of Latvia.