SRS taxpayer A rating: what it means and how it is determined

• A: the company pays taxes on time and in full and has no significant risk of violations. This company is a reliable taxpayer and can be a reliable partner for the state.
• B: the company generally fulfils its obligations to the state, but there is room for improvement: submitting returns earlier and preparing them more accurately, declaring and paying all taxes on time.
• C: the company has been removed from the VAT payers’ register because of violations, or the SRS has decided to suspend its business activity.
• N: inactive taxpayers. According to the company’s own declared information, it does not carry out business activity.
• J: newly registered taxpayers. Such a company was established within the last six months.

As the Ministry of Finance explains, the law sets out the indicators of tax compliance that the SRS uses when assigning a taxpayer a rating level:

• assessment of registration data;
• indicators of the submission of returns and reports;
• indicators of the fulfilment of tax obligations;
• results of tax and customs administration measures;
• assessment of wages;
• assessment of tax declaration risks.

In its EDS profile, a company sees these indicators marked with colours. A green indicator has been met flawlessly. A yellow indicator needs attention and improvements should be planned, while a red indicator is critical and must be improved.

The Ministry of Finance states that the SRS provides companies with an A rating with all necessary support and a wide range of benefits, while control measures are planned only for companies with a risk of violations.

As examples, the Ministry of Finance has cited measures the SRS has provided for A-rated taxpayers: a reply to an application within 10 working days, a reply to a question submitted in EDS within five working days and a refund of overpaid value added tax no later than within 10 working days. The SRS publishes the full list of benefits on its website.

The Ministry of Finance stresses that a lower taxpayer rating does not automatically mean that a company breaks the law or is not trustworthy. The reasons for a lower rating can vary, but the probability that cooperation will not go as originally intended is relatively higher. Partners should therefore pay more attention to managing the risks of the relationship.

An A rating is not in itself a guarantee of accounting service quality. It reflects the company’s compliance with its tax obligations.

The overall rating assessment is publicly available in the SRS public database. A company can also voluntarily share its detailed assessment: print it or send it to a business partner in EDS.

Taxpayers can improve their indicators and raise their assessment accordingly. According to information provided by the Ministry of Finance, the assessment is updated once a quarter.

SolConto has received an A taxpayer rating from the SRS, indicating good tax compliance.

This is particularly relevant for an accounting firm: a provider that helps other companies comply with tax and accounting requirements also demonstrates a responsible approach to its own obligations.

Ministry of Finance: The new taxpayer rating system is available to businesses and Taxpayer rating: a tool for assessing potential transaction risks. State Revenue Service: Taxpayer rating. All sources are in Latvian.