Latvia: National Euro Changeover Plan and Euro Changeover Perspective aproved
Latvia became the European Union Member State on May 1, 2004. The Treaty of Accession envisaged that Latvia shall have to introduce the euro. Although to introduce the euro Latvia has to comply with several economic criteria defined by the EU Member States, as Euro changeover target date is established January 1, 2014.
To facilitate timely performance of the euro changeover related activities, the Government has approved Latvia's National Euro Changeover Plan and Euro Changeover Perspective.
The dual circulation period of both currencies – latvian lats (LVL) and euro, shall be for 2 (two) weeks from the date of introduction of euro.
Within this period, receiving payments in LVL, the balance shall be issued in euro, excluding machines (devices), where starting with the day of introduction of euro, shall be used only euro currency and except public transport services, where receiving payments in LVL, balance shall be given in LVL, but upon receipt of payment in euro, the balance shall be issued in euro.
In Credit institutions LVL cash exchange to euro shall be for 6 (six) months from the date of introduction of the euro.
The share capital of companies from January 1, 2014 shall be denominated from LVL to euro according to the exchange rate set by the Council. The share capital shall be changed within 30 months from January 1, 2014.
During conversion of LVL to the Euros shall be rounded to the nearest cent, taking into account the third decimal after the comma. If the third decimal after the comma is between 0 and 4, then the value of a cent does not change. If the third decimal is 5 to 9, the cent shall be rounded per one unit on top.
The exchange of prices of goods and services for LVL to euro shall be performed using the exchange rate of the Council. The amount and the value of the money after the exchange shall be rounded to the nearest cent.
The dual display period for prices begins 3 months before the day of euro introduction and lasts 6 months after the day of introduction of euro.
On the day of introducing euro, in the accounting registers shall be recalculated each accounting registry entry balance and value of each accountancy unit in LVL to equivalent in euro.
As of the euro introduction day, in the accounting registers entries are made using the measure of value - euro. Source documents, the measure of value of what is the LVL or some other currency, relating to the accounting period after the introduction date of euro, and what before introduction day of euro have not been used for entries in the accounting, shall be converted into euro pursuant to the exchange rate.
In Annual reports and financial statements for the year of account, ending in the euro introduction day or after that, the amount of funds shall be established in euro.
In the first year of account, in what included funds are established in euro, as comparable data shall be established data from previous year of account, recalculated in euro.
In the Tax and informative declarations included fund amounts have to be indicated in the currency what was the legal instrument of payment at the end of the tax period.
From the day of introduction of euro, all tax (fee) payments are made in euro.
In order to ensure the tax (including advance payments), state and local fee, late charges and penalty payments in euro from the day of introduction of euro, all amounts are converted in euro.
Also Tax authorities and State Social Insurance Agency converts all payments in euro. The Bank of Latvia in the euro introduction day in the Credit Register updates the general info relating to euro introduction on the client or the client's guarantor's obligations in LVL (if the obligations have not expired or transferred to another person). The Bank is responsible that the update is done pursuant to the exchange rate.
Tax Attorney & Founding Partner
Gencs Valters Law Firm, Riga
Email: firstname.lastname@example.org Tel: +371 67 24 00 90
For questions, please, contact Valters Gencs, attorney at law at email@example.com
The material contained here is not to be construed as legal advice or opinion.