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Tax Accounting

Course developer

Prior knowledge

Ekon2079, Simple-entry Accounting

Ekon2081, Finance and Credit

Replaced course

Ekon2135 [GEKO2139] Tax Accounting

Course abstract

The aim of the study course is to gain knowledge about the procedure for calculating taxes, as well as understanding the guidelines of tax policy.The course provides knowledge of the kinds of taxes and the obligations, rights and responsibilities of an enterprise as a taxpayer. Students learn tax calculation and declaration and the payment procedure, as well as the procedure of cooperation between an enterprise and the tax administration: the rights of taxpayers to claim tax relief, extend a tax payment deadline, dispute the decisions of the tax administration, as well as the right of the tax administration to perform tax calculations.

Learning outcomes and their assessment

Students will be able to demonstrate:
KNOWLEDGE of
1) The obligations and rights of a taxpayer (practical assignments).
2) The role of taxes in the government budget, as well as of the tax policy guidelines (practical assignments).
3) The nature of taxes, the rates, the calculation and the payment procedure, as well as the requirements for preparing tax returns (practical assignments, tests, presentation).
SKILLS to
4) Perform tax calculations and give relevant explanations (practical assignments, tests).
5) Apply various taxation regimes (practical assignments, tests).
6) Fill in tax returns (practical assignments).
COMPETENCES to
7) Formulate, describe and analyse tax policy guidelines.
8) Independently estimate and calculate taxes based on the knowledge and skills acquired (practical assignments, tests).
9) Independently analyse tax calculations based on the knowledge and skills acquired, apply the theoretical and practical knowledge acquired, put theory into practice and project taxes to be paid by a newly established enterprise (presentation, examination).

Course Content(Calendar)

1) The tax accounting legislation and the procedures for the application thereof. National laws and the amendments thereto. Cabinet regulations and the amendments thereto. Annotations of legislative amendments. SRS methodological materials. Enquiries to the SRS, the requests therefor and the use thereof. Databases available on the SRS website and the use. Case law regarding tax matters. Tax consultations (lecture - 1 hour).
2) Obligations of an enterprise as a taxpayer. The registration of an enterprise with the State Revenue Service. The registration of organisational units. Changes in taxpayer data. The general procedure for calculating, paying and declaring taxes. Taxation period. The procedure for using strict accountability documents. The procedure for using transaction receipts. Declaring cash transactions (lecture - 1 hour).
3) Rights and responsibilities of an enterprise as a taxpayer. Electronic declaration system. Tax payment deadlines and the extension thereof. Correction of tax returns. Correction of tax calculations. Recovery of overpaid taxes. Kinds of SRS inspections. Thematic inspections. Tax audits. Tax debts and penalties. The procedure for disputing and appealing decisions of the SRS. Liability for tax violations (lecture - 1 hour, practical work - 1 hour).
4) Payroll tax accounting. Employee movement record-keeping. Remuneration tax calculation and accounting. Non-taxable income and tax relief. Calculation and record-keeping of remuneration relief. An employment record book and the procedure for the use thereof. Calculation of state social insurance contributions. Mandatory state social insurance contributions paid by the employee and the employer. Remuneration-related tax and information reports. Incomes attributable to remuneration. Remuneration to members of the executive board. Loans attributable to incomes. Income tax for seasonal agricultural workers (lecture - 3 hours, practical work - 4 hours).
5) Personal income tax on natural person earnings. Earnings subject to personal income tax, the rates and the procedure for the application thereof. Personal income tax calculation and tax reports. Eligible expense limits and the application thereof. Incomes not subject to personal income tax and the record-keeping thereof (lecture - 2 hour, practical work - 2 hours).
6) Calculation and record-keeping of state social insurance contributions. Mandatory socially insured persons and the insurance procedure therefor. Reports on state social insurance contributions (lecture - 1 hour, practical work - 2 hours).
7) Micro-enterprise tax accounting. The procedure for calculating and paying micro-enterprise tax. Micro business tax rates. Restrictions on micro-enterprises. Tax returns for micro-enterprises. The procedure for micro-enterprise tax distribution. State social insurance for micro-enterprises (lecture - 1 hour, test - 2 hours).
8) The procedure for calculating and paying immovable property tax. Property subject to immovable property tax and tax rates. Tax payment procedure. Tax exemptions. Responsibilities of an enterprise (lecture - 1 hour).
9) The procedure for calculating and paying natural resource tax. Natural resources subject to the tax and tax rates. Tax payment procedure. Tax exemptions and opportunities for the application thereof. Excise tax calculations and the payment procedure. Goods subject to the tax and tax rates. Tax payment procedure. Tax exemptions (lecture - 1 hour).
10) The procedure for calculating and paying company car tax (CCT). Company cars subject to the tax and tax rates. Taxpayers. Tax payment procedure. Tax exemptions. The procedure for exploiting lent and rented passenger cars, tax record-keeping and calculation (lecture - 1 hour, practical work - 1 hour, test - 1 hour).
11) Value-added tax accounting (VAT). Registration as a VAT payer. Option not to register as a VAT payer. Record-keeping of VAT taxable and non-taxable transactions. The place and time of a transaction. Application of different VAT rates. Tax exemptions. VAT invoice. Record-keeping of input VAT. Restrictions on input tax. Input tax adjustment for bad debts. VAT calculation and record-keeping. The right to deduct input tax on purchased goods, services and imported goods before registering a person in the register of VAT payers of the State Revenue Service. Application of VAT to transactions with EU Member State enterprises, import and export transactions. Special VAT application procedure. Special taxation regime. Reverse tax payment. VAT declaration. The procedure for recovery of VAT overpayments. Application of the cash principle. Exclusion from the VAT register. VAT refunds for agricultural enterprises (lecture - 3 hours, practical work - 5 hours).
12) Enterprise income tax (EIT) accounting. Tax base calculation. Tax on dividends. Expenses not related to economic activity. Enterprise income tax relief. Tax relief for agricultural enterprises. Enterprise income tax return. The need and procedure for calculating transfer prices (lecture - 2 hours, practical work - 2 hours, test - 2 hours).
13) Planning of tax payments for a new enterprise – a presentation of results of independent work (practical work - 4 hours).

Requirements for awarding credit points

The course ends with an examination. The assessment is cumulative (100%), consisting of:
• Test 1. Calculation and record-keeping of payroll taxes and personal income taxes (20%).
• Test 2. Calculation and record-keeping of natural resource tax, immovable property tax, excise tax and company car tax (10%).
• Test 3. Calculation and record-keeping of value-added tax and enterprise income tax (20%).
• Independent work (10%).
• Presentation (10%).
• Examination (30%).

Description of the organization and tasks of students’ independent work

The student independently learns and consolidates the theoretical material, studies the regulatory base and prepares for practical assignements, independent work and its presentation, tests, and an exam.

Criteria for Evaluating Learning Outcomes

The final mark depends on the marks for the independent work, the tests, examination and the presentation. 10% are equal to one point on a 10-point marking scale.

Compulsory reading

1) Jurušs M. Nodokļi. Rīga: RTU Izdevniecība, 2019, 176 lpp.
2) Leibus I. Uzņēmuma darbības uzsākšana, grāmatvedība un nodokļi. Rīga: Lietišķās informācijas dienests, 2019, 173 lpp.
3) Leibus I. Pašnodarbināto grāmatvedība un nodokļi. Rīga: Lietišķās informācijas dienests, 2022, 260 lpp.
4) Leibus I., Pētersone I., Jesemčika A., Leibus I., Svarinska A. Grigorjeva R. Finanšu grāmatvedība. Mācību grāmata. Rīga, 2020, 319 lpp.

Further reading

1) Jurušs M. Nodokļu plānošana Latvijā un starptautiskā vidē. Rīga: Rīgas Tehniskā universitāte, 2021, 208 lpp.
2) Ketners K. Nodokļi un nodokļu plānošanas principi. Rīga: Tehnoinform Latvia, 2018, 321 lpp.

Periodicals and other sources

1) LR likumi un MK noteikumi: Latvijas Vēstnesis. Pieejams: www.likumi.lv
2) Bilance Rīga: Lietišķās informācijas dienests
3) Bilances Juridiskie Padomi. Rīga: Lietišķās informācijas dienests.
4) iFinanses.lv Rīga: Izdevniecība iŽurnāli, 2013 Elektronisks žurnāls. Pieejams: www.iFinanses.lv
5) plz.lv Rīga : Lietišķās informācijas dienests, Elektronisks žurnāls. Pieejams: www.plz.lv
6) Valsts ieņēmumu dienesta mājaslapa. Pieejams: www.vid.gov.lv
7) Taxation trends in the European Union. Data for the EU Member States, Iceland and Norway. Pieejams: http://ec.europa.eu/taxation_customs/resources/ documents/taxation/gen_info/economic_analysis/tax_structures/2021/report.pdf

Notes

Field theoretical basic course and IT course (Part B2) for the ESAF professional bachelor programme “Business and Enterprise Management”