Environmentally related taxes by economic activity Quality report for the 2017 data collection Country Latvia Date 30.09.2017 Contact person: Iveta Brezinska, iveta.brezinska@csb.gov.lv Regulation (EU) No 691/2011 in article 7 requires that Member States shall provide the Commission with a report on the quality of the data transmitted. The quality criteria as referred to in Article 12(1) of Regulation (EC) No 223/2009 shall be applied. Those quality criteria are: relevance, accuracy, timeliness, punctuality, accessibility and clarity, comparability and coherence. Relevance The European Parliament and Council decided environmentally related taxes by economic activity shall be provided, through Regulation (EU) No 691/2011 on European environmental accounts adopted on 6 July 2011. These environmentally related taxes are an important policy instrument to influence economic behaviour by getting the prices right. These statistics are consistent with the System of Environmental-Economic Accounting (SEEA-CF) adopted the United Nations Statistical Commission as a world-level statistical standard in March 2012. Accuracy Data was not revised since last transmission to Eurostat in 2016. Timeliness and punctuality The Regulation requires environmentally related taxes to be provided for the first time on 30 September 2013. Latvia transmitted the data to Eurostat on 30.09.2017 covering the years 2008-2015. Accessibility and clarity Data will be made available on Eurostat s web site as soon as possible after checking. Data are published also in CSB web database. Data on 2015 will be published in 31.10.2017. 1
Comparability and coherence Main data sources for compilation of environmental taxes in breakdown by industries are State Revenue Service data and CSB data on energy consumption. Energy taxes. This group of taxes consist: Excise tax on oil products: Gasoline Diesel Kerosene Heavy fuel oil Liquid Petroleum Gas (LPG) Natural gas Energy tax (electricity); State duty for keeping oil products security reserves; Subsidized electricity tax; Revenue from state-owned European Trading System permits auction. For the excise tax paid by industries we used data about the use of oil products by NACE as distribution key. Energy use data are available for different oil products (gasoline, diesel fuel, oil gas, kerosene, fuel oil). Also for every type of oil product are known different consumption purposes (transport, production needs, heating). Using this information, total sums of paid taxes for different oil products taxes were allocated to industries. According to Electricity tax law taxpayers are electricity suppliers to end users and autonomous producers except if these producers generate and consume electricity for their own needs. Electricity obtained from renewable energy resources, generated in hydroelectric power stations or cogeneration electric stations are exempt from tax. Also, electricity used for the following purposes are exempt from tax: Electricity generation; The generation of heat energy and electricity in cogeneration; The carriage of goods and public carriage of passengers, including on rail transport and in public carriage of passengers in towns; Households users. Taking into account following all amounts of electricity tax revenues was allocated to NACE 35. 2
Tax for subsidized electricity producers was introduced in January 2014 and will be in force up to 31 December 2017. Tax is applied to the taxable income from the selling the produced electricity within the framework of the mandatory procurement or receiving guaranteed payment for the electric capacity installed. Taxpayers are producers of electricity who have the following rights: to sell electricity within the scope of mandatory procurement; to receive guaranteed payment for the electric capacity installed in a cogeneration unit or power plant; to sell electricity in accordance with the conditions of Section 40 of the Energy Law that were in force in the period from 6 October 1998 until June 2005. Considering that electricity tax revenues was allocated to NACE 35. Revenues from emission auctions were allocated to NACE based on information about issued and surrender allowances. If company surrendered more allowances than it was issued for them, then we assume that difference was bought in emissions auctions. Amount of bought allowances were multiplied by average price, then difference from total revenues from emission auctions and calculated amounts were allocated to non- residents. Transport taxes. This group of taxes covers: Tax on cars and motorcycles; Tax on company cars; Vehicle use tax (Annual vehicle duty till 2011); Toll for the Use of Motorways. Car and Motorcycle tax are paid by all legal persons and individual persons in whose name cars and motorcycles are registered in Latvia. Cars previously not registered and first registered in foreign country after 1 January 2009 are liable to the tax according to the CO2 emissions. Motorcycles previously not registered and first registered in foreign country after 1 January 2009 are liable to the tax according to engine capacity. Company car tax shall be paid by commercial entities which own or hold passenger vehicles which are used also for personal needs of employees and/or proprietaries. Vehicle use taxes are paid by person who own, hold or have in possession vehicle. Till 31.12.2010 it was covered as Transport Annual Duty, from 01.01.2011 law on Vehicle Use Tax and Company Car tax. Vehicle annual duty (vehicle use tax) is paid every vehicle reiterated or for first time reiterated vehicle in Latvia and is paid once a year. All enterprises and physical persons who 3
own vehicle have to pay this duty. Tax rates are calculated according to vehicle full mass and type of vehicle (passenger cars, buses, trucks etc.) Data for vehicle use tax are available in two groups taxes paid by physical persons and taxes paid by enterprises (judicial persons). Tax revenues from physical persons were allocated to households. For enterprises data about use of oil products (gasoline, diesel, bio fuels, LPG) for transport by NACE were used to disperse transport taxes by industries. Toll for the Use of Motorways in force from 1 July 2014 foresees a tax for the use of motorway by transport vehicle. Anyone who drives or operates a heavy goods vehicle (mass<3500 kg) need to pay the user charge before the vehicle enters the country. All revenues from Toll for the Use of Motorways was allocated to NACE 49. Pollution taxes. Only one tax in Latvia meets requirements of pollution tax is Natural Resource tax. The purpose of the Natural Resources Tax is to promote economically efficient use of natural resources, restrict pollution of the environment, reduce manufacturing and sale of environment polluting substances, promote implementation of new, environment-friendly technology, support sustainable development in the economy, as well as to ensure environment protection measures financially. Although it s just one tax it consists of many taxable objects: Waste disposal and polluting emissions; The volume of greenhouse gases emitted by technological equipment, which is not included in the amount of transferred emission quotas; Goods and products harmful to the environment; Packing of goods and articles and disposable tableware and accessories; Radioactive substances; Coal, coke and lignite (brown coal); Plastic bags. Information about Natural resource tax, which CSB receives from State Revenue Service, is available for every taxpayer (by enterprise registration number). Resource taxes include taxes on acquisition and use of natural resources. In Latvia only part of natural resource tax corresponds to this definition. Natural resource tax on any natural resource acquired as a result of economic activities, such as extraction of water, sand, dolomite, clay, fieldstones, peat and other. Also as a resource tax we account revenues from: 4
Payment for lease of reservoirs and fishing rights and use of fishing rights (licenses) (NACE 03). Income from lease of reservoirs and fishing rights and non-production use of fishing rights (fishing cards) (hoseholds). Data for years before 2008 in NACE rev2 was not recalculated. 5