Cash under the mattress meets the taxman: what to do if a VID letter about 2024 deposits arrives

Every Latvian household has its own financial institution: a sock, a jar in the cupboard or an envelope in a book nobody ever reads. This autumn those institutions have acquired a regulator. VID, the State Revenue Service, will send letters through its EDS electronic filing system in November and December to people whose cash deposits into bank accounts in 2024 may point to undeclared income.

A little panic, a long guide

Not everyone who has ever fed a cash machine will get one. VID has compared bank data on deposits with people’s income and will write only where the amounts paid in exceed declared income or no income was declared at all. The letters will go out gradually, to about 3,000 people a week, until 18 December. None will be sent during the holiday week of 16–20 November, so the festive table can be laid in peace.

What the mattress should know

First, a deposit on its own does not mean tax is due on it, VID said. If you withdrew money last week for a new washing machine, changed your mind and paid it back in, the state does not see that as new wealth. The same goes for savings from earlier years, though you should check what income they came from and whether it had to be declared at the time.

Second, if there is no additional income to declare, nothing needs to be done after the letter: no explanations, no documents. If something undeclared did end up in the mattress, you have 30 days to file or correct your 2024 income tax return. Any extra tax must be paid with late-payment interest, which EDS will calculate itself.

Each letter comes with a guide, and questions can be sent through the “Correspondence with VID” section of EDS. The mattress itself need not take part in the correspondence.