Austrian company in dispute with Latvian tax authority over €54,000 VAT refund after automating candy production line in Ādaži
Austria-based 'Automation X Gmbh', which automated a candy production line in Ādaži, is embroiled in a lengthy legal battle with the State Revenue Service over a VAT refund of more than €54,000.
Five years ago, in the spring of 2021, the Austrian technology company 'Automation X Gmbh' reached an agreement with SIA 'Orkla Biscuit Production' for a major project. The foreign specialists committed to supplying and implementing a full raw material processing automation system at the confectionery manufacturer's new factory in Ādaži.
However, during the project, a dispute arose with the State Revenue Service (VID). The core of the conflict is the refund of value-added tax (VAT) exceeding €54,000, and the question of whether the company was required to register a branch in Latvia while carrying out temporary work, along with all the ensuing obligations.
The case has gone to court and the litigation has been ongoing for several years. This situation highlights the challenges foreign companies face when working temporarily in Latvia, particularly regarding tax administration and branch registration requirements.
