State Revenue Service fines Bolt transport service company with EUR 1.4 million for tax evasion

2022-09-12
LETA/TBT Staff

RIGA - The State Revenue Service has ordered Bolt transport service company to pay EUR 1.4 million into the state budget in unpaid taxes, Latvian public television's analytical news program De Facto reported on Sunday.

This is a second time the Latvian tax authority has fined the Estonian company for tax evasion in Latvia. De Facto reported, meanwhile, that Yandex that was Bolt's competitor, left Latvia without paying a cent in taxes, but VID has not fined the company.

Bolt started operations in Latvia in 2016 under the name of Taxify. The application with a possibility to call a taxicab through an app created problems with the State Revenue Service from the very start. Now cooperation is better, but there are still disagreements about payment of the corporate income tax.

Bolt app in Latvia is registered by Estonian company Bolt Operations, but since 2016 the company has its own representation in Latvia, which has not been registered as a company, but still it should pay corporate income tax for its operations in Latvia.

Bolt has been fined for a similar violation also earlier - with EUR 200,000. The company has appealed the decision, as well as the new fine.

"Bolt has paid all taxes required by the revenue service. There is a difference of opinions about how the corporate income tax should be calculated, considering the agreement on taxes signed between Latvia and Estonia. The appeal has been submitted to court to clarify the methodology that should be applied in tax payment," said Bolt representatives.

The State Revenue Service did not explain the particular case in detail, just said tat Bolt has to pay taxes in Latvia due to the chosen business model. Yandex, however, operated in Latvia without registering a representation or a company in this country, therefore it did not have to pay corporate income tax at all.

The EU and other countries of the world have agreed to introduce a tax in the future that would make digital platforms pay income tax in any country where they are operating, irrespective of representations of companies registered in these countries. This means that taxes could be collected also from such companies as Google, Amazon, Facebook and others.