Building or Renovating? Residents of Latvia Must Account for Every Euro Spent 0 21

Gifts – to the Studio!

It is expected that this requirement will create problems for those who cannot confirm the legality of the origin of their funds, and cash transactions will fall into the risk zone. The authors of the new regulations hope to raise an additional 2 million for the budget through the declaration of construction financing.

In practice, this means that from the four sources of income offered in the system – "income from paid work", "income from economic activity", "loans", and "other sources of income" – one or more options corresponding to the situation must be selected. However, keep in mind that, for example, when choosing "other sources of income", more specific information must be provided, such as "gift", "inheritance", etc.

Have You Been Saving Brick by Brick All Your Life?

All the information provided will be sent to the State Revenue Service (SRS), which will compare the declared source of funding with its information about the individual's income. If discrepancies are found or doubts arise about the origin of the funds, the tax authority may initiate a detailed audit.

"If you have lived on the minimum wage for several years, of course, the SRS may have questions about how you found the means to build a house," commented the new rules by jurist Lauris Klāgishs.

The SRS stated that the information available in the BIS about the source of funding will be analyzed using a computerized risk analysis system. For example, if a person indicated savings as the source of funding, it will be assessed whether they could have such funds at their disposal, taking into account income from paid work, registered economic activity, dividends, property sales, inheritance, gifts, etc. over the previous period.