Continuing on the theme of the most topical issues of cash restriction, I would like to draw your attention to the following issue.
Question. Does the restriction on the use of cash in Article 30 of the Law on Taxes and Duties apply to multiple transactions for the purchase of fuel by purchasing the same goods from the same counterparty, retaining all the essential elements of the transaction, with only the amount and date of the transaction changing. If applicable, over a period of time, or for the entire duration of the relationship with a particular counterparty.
For example, the taxpayer plans to buy fuel from a fuel dealer (petrol station). The taxpayer does not have a written cooperation agreement with the fuel dealer, but the essential elements of the agreement are the provision of fuel for immediate payment, the duration of the cooperation is not fixed, and the amount depends on the amount of fuel needed for business purposes. During the cooperation period, fuel purchases made in cash are limited to a maximum of LVL 3 000 per month and could exceed LVL 10 000 over the whole cooperation period.
According to Section 30 (1) and (1.1) of the Law “On Taxes and Fees”, taxpayers must declare all transactions made in cash during the previous month, the amount of which exceeds LVL 3,000, by the 15th of each month in accordance with the procedure established by the Cabinet of Ministers.
The procedure for taxpayers, except for natural persons who are not individual traders and who have not registered with the State Revenue Service as economic activity performers, to declare their mutual cash transactions on a monthly basis is set out in the Cabinet of Ministers“ Regulation No 237 of 10 April 2007 ”Regulations on Declaring Cash Transactions".
Thus, the taxpayer must declare all cash transactions (operations) of fuel purchase with one counterparty (fuel dealer) during the previous month, if the amount of such transactions (operations) exceeds LVL 3,000, in accordance with the procedure set out in Cabinet of Ministers Regulation No 237 of 10 April 2007.
However, if the taxpayer has a contract (transaction) with a fuel dealer for the purchase of fuel for a certain period of time, the amount of fuel purchase transactions made in cash during that period of time may not exceed LVL 10 000.
