Procedures by which the Information is provided to the State Revenue Service to Ensure the Compliance with the Requirements Laid Down in the Law On the Agreement between the Government of the United States of America and the Government of the Republic of Latvia to Improve International Tax Compliance and to Implement FATCA

Issued pursuant to
Section 15, Paragraph four of the law On Taxes and Duties and Section 63,
Paragraph one, Clause 11.² of the Credit Institution Law

1. This Regulation prescribes the procedures and time periods by which the Latvian financial institutions shall provide information to the State Revenue Service to ensure the compliance with the requirements laid down in the law On the Agreement between the Government of the United States of America and the Government of the Republic of Latvia to Improve International Tax Compliance and to Implement FATCA (hereinafter - the Agreement).

2. The terms used in this Regulation:

2.1. Latvian financial institution - taxpayers which conform to the definition of a Latvian financial institution determined in the Agreement and to which the exceptions referred to in Annex II to the Agreement do not apply;

2.2. FATCA XML schema - a data exchange format developed by the Internal Revenue Service of the United States of America to ensure data exchange on taxpayers, their accounts, and transactions carried out. FATCA XML schema and the documentation related thereto is available on the website of the Internal Revenue Service of the United States of America;

2.3. WEB service - a solution ensured by the State Revenue Service which is provided to ensure an automated exchange of the information provided for in the Agreement with the Latvian financial institutions online in a format of an XML file;

2.4. reporting period - a calendar year regarding which information is provided.

3. The State Revenue Service is the competent authority for ensuring the exchange of information within the scope of the Agreement.

4. The State Revenue Service shall, within five working days after the request of a Latvian financial institution, ensure granting of the rights of the WEB service user to the Latvian financial institution.

5. Latvian financial institutions, using the WEB service, shall submit electronically the information indicated in Sub-paragraph 2(a) of Article 2, Sub-paragraph 1(b) of Article 4, and also Paragraph two of Article 4 to the State Revenue Service by 31 July of the year following the reporting period.

5.¹ If the Latvian financial institution does not have at its disposal information indicated in Paragraph 5 of this Regulation, it shall, as soon as possible, but not later than until 31 July of the year following the reporting year, submit a nil report to the State Revenue Service.

[28 July 2015 / Paragraph shall come into force on 1 January 2016. See Paragraph 2 of the amendments]

6. Latvian financial institutions shall provide information indicated in Paragraph 5 of this Regulation to the State Revenue Service by complying with the exceptions provided for in Sub-paragraph 3(a) of Article 3, and also Sub-paragraph 1(b) of Article 4 of the Agreement. Latvian financial institutions do not provide information indicated in Paragraph 5 of this Regulation in the case referred to in Section II, Paragraph A, Section III, Paragraph A, Section IV, Paragraph A, and also Section V, Paragraph A of Annex I to the Agreement.

[1 November 2016]

6.¹ Latvian financial institutions have the right to apply due diligence requirements and time periods which have been laid down in the Agreement for accounts opened and not closed as of 30 June 2014 (pre-existing accounts) to new accounts opened after 30 June 2014, provided that such new accounts are or will be opened for such clients who, as of 30 June 2014, already have accounts opened in the relevant Latvian financial institution.

[28 July 2015]

7. Latvian financial institutions shall prepare the information indicated in Paragraphs 5 and 5.¹ of this Regulation in the format of one XML file in conformity with the requirements of FATCA XML schema.

[28 July 2015; 1 November 2016]

8. The State Revenue Service shall, within five working days after receipt of the information referred to in Paragraphs 5 and 5.¹ of this Regulation, inform the Latvian financial institution electronically through the WEB service regarding receipt of the information. If the State Revenue Service detects a non-compliance in the information referred to in Paragraphs 5 and 5.¹ of this Regulation, it shall, within five working days after receipt of the information, inform the Latvian financial institution electronically through the WEB service regarding the detected non-compliances and the necessary corrections.

[28 July 2015 / Amendment to Paragraph shall come into force on 1 January 2016. See Paragraph 2 of the amendments]

9. A Latvian financial institution, on the basis of Paragraph 8 of this Regulation, shall, within ten working days after the information regarding the necessary corrections has been received from the State Revenue Service, submit them to the State Revenue Service, using the WEB service.

10. The State Revenue Service shall ensure the sending of the information received from Latvian financial institutions to the Internal Revenue Service of the United States of America by 30 September of the year following the reporting period.

11. If the Latvian financial institution does not have the opportunity to provide information according to Paragraphs 5 and 5.¹ of this Regulation, it shall, as soon as possible, but not later than by 31 July of the year following the reporting period, inform the State Revenue Service regarding the reasons for non-submission of information and the foreseeable date for the submission of information.

[28 July 2015 / Amendment to Paragraph shall come into force on 1 January 2016. See Paragraph 2 of the amendments]

12. If the foreseeable date for submitting information referred to in Paragraph 11 of this Regulation is determined after 30 September of the year following the reporting year, the State Revenue Service shall, within 20 working days after receipt of the information referred to in Paragraph 11 of this Regulation, inform the Internal Revenue Service of the United States of America regarding the reasons for non-submission of information and the foreseeable date for the submission of information.

[1 November 2016]

13. If the Internal Revenue Service of the United States of America notifies the State Revenue Service that the information provided by the Latvian financial institution is erroneous, incomplete or otherwise non-conforming to the Agreement, the State Revenue Service shall, as soon as possible, but not later than within 20 working days after receipt of information from the Internal Revenue Service of the United States of America, inform the relevant Latvian financial institution thereof, using the Electronic Declaration System of the State Revenue Service. Upon notifying the Latvian financial institution, the State Revenue Service shall make available to the Latvian financial institution the notification of the Internal Revenue Service of the United States of America, and also inform regarding the necessary corrections, specifying the date when the information from the Internal Revenue Service of the United States of America was received.

[1 November 2016]

14. A Latvian financial institution, on the basis of Paragraph 13 of this Regulation, shall, within 40 working days after the receipt of information from the State Revenue Service, electronically submit the requested or corrected information referred to in Paragraphs 5 and 5.¹ of this Regulation using the WEB service, if the Internal Revenue Service of the United States of America notifies of the non-compliance with the requirements of the FATCA XML schema or with the Electronic Declaration System of the State Revenue Service, if the requested information is to be submitted in writing.

[28 July 2015; 1 November 2016]

15. If the Latvian financial institution does not have the opportunity to provide information according to Paragraph 14 of this Regulation, it shall, as soon as possible, but not later than within 40 working days after receipt of the information referred to in Paragraph 13 of this Regulation from the State Revenue Service, inform the State Revenue Service regarding the reasons for non-submission of information and the foreseeable date for the submission of information.

[1 November 2016]

16. The State Revenue Service shall ensure the protection of the received data in accordance with the laws and regulations laying down the protection of information in relation to personal data processing and free circulation of such data.

17. This Regulation shall come into force on 1 June 2015.

Prime Minister Laimdota Straujuma

Minister for Finance Jānis Reirs

Translation © 2018 Valsts valodas centrs (State Language Centre)