Question. My company is involved in road haulage. Fuel is filled at a service station using cash withdrawn from an ATM. Cheques are cleared in advance. Are these transactions like cash transactions? Do they have to be declared as the amounts exceed LVL 3 000? And must the limit of LVL 10 000 not be exceeded for such refuelling? Thank you for your reply!
It is not known from the question whether the company is engaged in international road haulage or not. However, I will give an answer even if the company is engaged in international road haulage.
Law on Taxes and Duties Article 30(1) states that taxpayers, except natural persons who are not sole traders, shall declare each month by the 15th of each month, in accordance with the procedure established by the Cabinet of Ministers, all cash transactions (regardless of whether the transaction takes place in one operation or in several operations), the amount of which exceeds LVL 3,000, carried out between them during the previous month. Taxpayers, except natural persons who are not sole traders, shall not be allowed to carry out cash transactions in excess of LVL 10 000 (regardless of whether the transaction takes place in one operation or in several operations).
In turn, as we are required by Article 2(2) of the Law, the restriction on the use of cash referred to in the first paragraph of this Article shall not apply only to ship agency and aircraft agency companies, as well as to international road transport and freight forwarding transactions carried out by international road transport and freight forwarding companies. The said commercial companies shall declare, in accordance with the procedure established by the Cabinet of Ministers within the time limit established in paragraph 1 of this Article, the transactions carried out during a month, the total amount of which exceeds LVL 10 000.
We can see that there is a difference between the two parts of the same article of the law, and that the restrictions on the use of cash do not apply to international road haulage and freight forwarding transactions carried out by commercial road haulage and freight forwarding companies.
Thus, if a company is, for example, a commercial freight forwarding company which settles in cash international freight forwarding transactions (including refuelling at petrol stations), then the of the law About taxes and duties Article 30(2), it follows that the undertaking in question is not of the law About taxes and duties Article 30(1). Consequently, a company cannot commit an administrative offence for which liability is Latvian Code of Administrative Offences 159.7(3).
However, if the company is not engaged in international freight transport but has domestic operations, the explanation is slightly different. I already gave an analogical answer in my previous article Restrictions on the use of cash. Part 3 (iFinanses.lv, 24.09.2012.), where I stated the following.
On the basis of Regulation No 584 of the Cabinet of Ministers of 21.10.2003 Rules on accounting of treasury operations (Cabinet Regulation No 584), point 38 the cashier's cash receipts and disbursements statement together with the cash receipts and disbursements warrants (for credit institutions, credit unions and the Bank of Latvia - the supporting documents for cash deposits and disbursements) and the supporting documents, if any, attached to them (for example, a list of disbursements, a written order or authorisation from the head of the enterprise to advance cash to an employee of the enterprise for the performance of business tasks, a receipt registered with the State Revenue Service or a summary of the data in such receipts, tickets or cash register register), shall be submitted to the accountant in charge against signature in the manner prescribed by the head of the enterprise.
It follows from the above legal provision and the situation described above that an undertaking carries out internal cash transactions, the accounting for which is governed by Cabinet Regulation No 584.
Thus, the economic and substantive nature of these activities is to organise cash flow within the enterprise, since the employee (the advance payment person) will be handling the enterprise's cash on its behalf when carrying out economic tasks. Consequently, in this legal situation Law on Taxes and Duties Article 30 shall not apply.
