Tax agency to question cash deposits that may exceed declared income

Latvia’s State Revenue Service will send letters through its electronic declaration system in November and December to people whose 2024 cash deposits may indicate undeclared income, the public broadcaster LSM reported.

Recipients will be asked to review where the money came from and, if necessary, submit or amend their 2024 annual income declaration within 30 days of receiving the letter. The agency says a cash deposit does not automatically mean tax is due. People who have no additional income to declare do not need to provide an explanation or documents.

The service compared information from banks on cash deposits with information about residents’ declared income. Letters will go only to people whose records show a possible discrepancy, such as deposits exceeding declared income or no income declaration at all. The comparison includes information declared by the individual and information supplied by others, such as employers.

The letters are due to be sent in stages through December 18, 2026, to about 3,000 people a week.

Recipients are advised to read the letter and its accompanying guide, review their 2024 bank statements and check whether the sources of deposited cash needed to be declared. If they find income that should have been declared, they must file or amend their declaration within 30 days, retaining information already entered correctly. Any additional tax due must be paid along with late-payment interest, which will be calculated in the electronic declaration system after the declaration is submitted.

Redepsiting cash previously withdrawn from one’s own account does not by itself create new income. The same applies to depositing savings from earlier years.