BAUER secures a win in a tax dispute with the State Revenue Service

On 4 August 2023, the Administrative District Court ruled in favour of the German company BAUER Spezialtiefbau GmbH in case No A420291922 ordering the State Revenue Service of Latvia to refund the value added tax along with late payment interest of over EUR 300 000.

The dispute centred around the decision by the State Revenue Service that BAUER, as a taxpayer from another EU Member State not conducting economic activity in Latvia, was not entitled to a tax refund for services received in Latvia from another registered taxable person associated with the construction of real estate.

In the dispute, the Administrative District Court determined that BAUER had met the necessary conditions for entitlement to a VAT refund and that the State Revenue Service could not prevent BAUER from exercising this right simply because it was not registered in the VAT payer register in Latvia. The court dismissed the State Revenue Service’s allegations regarding BAUER’s fixed establishment in Latvia. The State Revenue Service did not appeal the decision, which has now taken effect.

COBALT team representing BAUER included Partner Sandija Novicka, Specialist Counsel Sabīne Vuškāne and Associate Gabriela Šantare.