A case on procedure for repayment of value added tax has been initiated
The Second Panel of the Constitutional Court has initiated a case “On Compliance of Item 10 of Section 16 of the Law on Taxes and Fees with Article 1 and Article 105 of the Satversme (Constitution) of the Republic of Latvia”.
Article 1 of the Satversme provides that Latvia is an independent democratic republic, whilst Article 105 of the Satversme guarantees the right to own property.
The contested norm provides that it is allowed to request the repayment of overpaid amounts of tax within a period of three years after the payment time period specified by law for the particular tax.
The applicant – SIA “Industriālais termināls” – indicates that, according to a decision of the State Revenue Service, it has been denied repayment of the VAT because the repayment period of three years has been exceeded. The applicant indicates that he has overpaid the TVA at the time when the term of three years has not yet been introduced, whilst previously taxpayers had the right to request repayment of overpaid amounts of tax for an indefinite period of time. The applicant holds that this term of three years has retroactive effect, which infringes legal security of the applicant and restricts his rights to property in a non-proportionate manner.
The Saeima has been asked to provide, before 19 March 2010, a reply on factual circumstances of the case and legal justification thereof. The term of preparation of the case is 15 June 2010.
Linked case: 2010-02-01