bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Friday 30.09.2016 | Name days: Menarda, Elma, Elna
LatviaLatvia

Baltic Taxi has created a system to avoid paying VAT to the country

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUBaltic Taxi uses a micro enterprise-based scheme that circumvents the payment of the Value Added Tax. In addition, this system does not provide any social guarantees to the company’s drivers. When asked about paying taxes, Panda taxi brand dealers become uncharacteristically non-talkative.

Baltic Taxi was originally founded as a cooperation partner for airBaltic when the airline was being managed by Bertold Flick. Both companies – airBaltic and Baltic Taxi – have similar emblems and similar colours. Everything was well-planned. One Janis Naglis was put up as owner of Baltic Taxi, as reported by Aizliegtais paņēmiens programme of LTV.

Bertold Flick became the main shareholder of Baltic Taxi in 2010. In 2012, when Flick left Latvia, Andris Skele took his place in the company. Baltic Taxi was taken over by Liepājas autobusu parks. Indirect shareholders of the company include Inpo17, which was indirectly owned by Andris Skele’s wife, daughters and Edgars Skenders. Business was good, and in 2013 Baltic Taxi was working with turnover of nearly EUR 5 million.

Then the company turned its sights to a new business concept – the country’s newly-adopted micro-enterprise tax regime. This is when fundamental changes had first appeared. Baltic Taxi was divided into countless small firms, owners of which became the taxi drivers. Cars were ‘tossed around’ to those firms. They did retain the original dispatch centre, however. This allowed the company to optimize tax payments, opposite to the point of micro-enterprises – development of small businesses.

After some time the State Revenue Service told the company that such actions are prohibited. An enormous tax debt was calculated – more than EUR 400,000, which was equal to all the money the company had saved up in 2013 and first half of 2014 after changing its original business model. Later Baltic Taxi decided to rename itself Baltijas taksometrs, which later followed the insolvency route. Now all tax debts are water under the bridge.

But the business did not end there. In May 2015, an unknown company named Environment Solution bought the Baltic Taxi brand from an auction and then founded a company of the same name.

It turned out later that Sergei Senkans is behind Environmental Solution. Senkans has ties to Andris Skele. In the 10th Saeima, where Skele was a deputy, Senkans was his official assistant. Now the brand has returned to its owner.

Baltic Taxi’s business architecture consists of a massive network of micro enterprises. SRS is still against this form of business. Naglis calls it a franchise system.

Baltic Taxi’s massive network’s accounting is managed by a high-class specialist. It doesn’t take a genius to figure out in whose interest the specialist works. It is worth mentioning that Ilze Palmbaha had once said that the high level of grey economy in the country is what keeps Latvia from developing.

The fact that all Borts companies pay annual taxes in very similar amounts – approximately EUR 4,000 – is not exactly a coincidence. EUR 4,000 is 9% of turnover a typical micro enterprise is supposed to pay to the state in taxes. In this case, turnover of each micro enterprise is nearly EUR 50,000. The key is that this amount is the threshold at which there is no need to register one’s company as VAT payer and pay 21% to the state. Should those firms merge, their total turnover would definitely exceed EUR 500,000, making it obligatory to pay a considerable amount of VAT.

According to LTV’s estimates, turnover of each ‘Bort’ is likely drawn out in accordance with accounting rules, rather than being objective. An interviewed taxi driver says that each Baltic Taxi driver has to pay EUR 110 to the office every day. This amount includes fuel money. The driver’s wage is everything earned above EUR 110. With good luck, a single driver can earn EUR 700 a month. It is worth keeping in mind that there are three drivers per car.

With that, the company earns EUR 3,300 from each car every month. The total earnings from a single car are EUR 5,400 per month and at least EUR 64,800 annually, which exceeds the state established VAT threshold (EUR 50,000). In addition, working in a micro enterprise mode, the EUR 4,000 paid by drivers to the state do not provide any substantial social guarantees. They can pay the social guarantee fees on their own. However, it is likely that they can only afford to pay that only when their shift comes.

Panda Taxi works with a similar principle – many small companies that form a single brand. The only difference is that drivers can use their own cars for work, but only as long as those cars comply with specific standards.

Ref: 102.109.109.5978


Leave a reply

10% increase in visitor numbers expected for Riga’s hotels

In 2016, hotels and other places of accommodation in Riga could experience a 10% increase in the number of visitors when compared to 2015, says manager of Riga’s Tourism Development Bureau Vita Jermolovica.

Russian proposal to ban baby boxes gains government backing

A proposal to ban baby boxes in Russia has gained the backing of the federal government but is facing sharp criticism.

Government approves Start-up Operation Support Law draft

On Thursday, 29 September, Latvian government approved Economy Ministry’s proposed draft for Start-up Operation Support Law to support and regulate operations of so-called start-up companies.

Swiss engineering firm ABB expands in Estonia

Swiss engineering system manufacturer ABB group will launch its new regional business service centre in Tallinn in October.

EUR 15,017 donated for infertility treatment programme in Latvia

To help finance infertility treatment programme, charity campaign organized by Butterfly Effect association in cooperation with Elvi and EGV Clinic has raised EUR 15,017 since the beginning of 2016.

Study: counterfeit medicine causes major losses for EU

Because of counterfeit medicine, the legal medical industry in Europe loses EUR 10 billion every year, which accounts for 4.4% of the entire trade volume of the pharmacy sector, as concluded in the latest European Union Intellectual Property Office study about counterfeit medicine and its effect on economies of EU member states.

«Death» shows support to UGF’s work in government during doctors’ protest

The protest act organized by Latvian Health and Social Care Workers Union near the Saeima gathered 300 to 350 people.

U.S. warns Russia about bombing of besieged Syrian city

The U.S. has warned Russia that Washington would stop cooperation with Moscow in Syria if Moscow would not stop the bombardment of besieged Aleppo.

Latvia supports Kristalina Georgieva as candidate for UN Secretary General post

Latvia supports EC Vice-President Kristalina Georgieva as a candidate for the post of UN Secretary General, as confirmed by Foreign Affairs Minister Edgars Rinkevics.

Aseradens: decline of electricity prices expected in Latvia

If reforms are successfully realized in the electrical energy market, Latvia may experience a decline in electricity prices, as announced by Economy Minister Arvils Aseradens.

MH17 investigators: Missile came from Russia, was shot from rebel-held territory

The Dutch-led international team of prosecutors stated on September 28 that it has found that the missile with which passenger plane on flight MH17 was downed in 2014 over eastern Ukraine was shot from territory held by pro-Kremlin separatists.

Politicians forget about transit industry as a source of income for state budget

Politicians and the public regularly discuss the lack of budget funds to afford improvements for healthcare, education, law enforcement. New taxes and new ways of adding money to the state chancellery are sought left and right. They forget that transit has always been a stable source of income for Latvia, Vesti Segodnya writes.

Study: most girls and half of boys in Riga do not tie their future to exact sciences

73.5% of girls and 49.1% of boys in Riga do not see their future associated with exact sciences, according to results of Jaunieši IT study carried out in Riga’s schools.

Businessmen: faster adoption of e-procurements system would benefit competition

To ensure more transparent procurements, businessmen urge government to introduce an electronic procurement system as soon as possible. This system is expected to ensure honest competition and help resolve other problems that are often present in state and municipal procurements.

President: KNAB supervisory institutions should explain the loss of classified documents

Institutions that supervise the Corruption Prevention and Combating Bureau have to determine the cause behind the loss of classified documents, as announced by Latvian President Raimonds Vejonis.

Data on students and graduates to be compiled for more effective budget planning

To help develop the State Education Information System, it is planned to expand one of its sections by creating a register for students and graduates. This is provided by amendments to the Law on Institutions of Higher Education supported by the Cabinet of Ministers.

Global trade growth slowing, WTO

The World Trade Organisation has this week released an altered forecast for the global trade growth for 2016, which, comparing to its previous forecast for the same period has been cut by over a third.

Latvia resettles 82 people as part of EU refugee programme

Today, 28 September, nine people were transported to Latvia from Greece as part of the European Union’s resettlement programme, as LETA was informed by the Office for Citizenship and Migration Affairs.

August’s construction costs declined by 0.4% in Latvia

Compared to July, the level of construction costs in Latvia dropped by 0.4% in August 2016. Prices of building materials decreased by 0.8%, maintenance and operational costs of machinery and equipment reduced by 0.1%, whereas labour remuneration of workers did not witness any significant changes.

One-third of state institutions to not have to report data on employees’ remuneration

On Tuesday, 27 September, the Latvian government accepted amendments to the Law on Remuneration of Officials and Employees of State and Self-government Authorities that relieve 233 state institutions from the duty to report information about remuneration of their employees.

Trial of two Russian 'observers' arrested at Adazi military base put off until 2017

On 27 September, Riga District Court decided to put off the viewing of the criminal case regarding the incident at Adazi military base involving two Russian citizens until 24 July 2017.

Valka expects even more alcohol buyers from Estonia next year

Because Estonia plans to raise excise tax for alcohol in January 2017, the number of alcohol buyers from the neighbouring country is expected to increase in Latvia’s border area stores, as predicted by Mayor of Valka Vents Armands Krauklis.

Study: Third of adults look into their phones at night

A study performed in the UK on addiction to smartphones found that a third of its adult population look into their devices at night, which often causes quarrels with their other halves.

Baltics and Iceland agree on strengthening mutual cooperation

Celebrating 25 years since the foundation of diplomatic relations between Iceland and Baltics, Latvian Foreign Affairs Minister Edgars Rinkevics visited Iceland’s capital city of Reykjavik on 26 September to discuss regional news and international relations with ministers from Iceland, Estonia and Lithuania.

Rimsevics: Latvia should prepare for future crises

Latvia should prepare for future crises, which will take place, said Governor of the Bank of Latvia Ilmars Rimsevics in his interview to 900 seconds programme of LNT.