Pradinis > Naujienos ir įvykiai > Court judgement sets new precedent in temporary residence permit dispute

Court judgement sets new precedent in temporary residence permit dispute
1 spalio, 2024

The work of our law firm’s attorney Kārlis Ešenvalds has resulted in a successful achievement in the litigation against the Office of Citizenship and Migration Affairs. The Administrative Regional Court on March 19, 2024, upheld appeal and declared the decision of the Office of Citizenship and Migration Affairs from October 14, 2019, to be unlawful. The Administrative Regional Court applied the conclusions expressed by the Senate in the relevant case (Senate’s judgment of June 14, 2023, in case No. SKA-158/2023). The Senate’s judgment has been recognized as a case law judgment.

The litigation involved a dispute concerning the registration of a temporary residence permit, which the company, as the inviter, sought to secure for its shareholder (investor). The Office of Citizenship and Migration Affairs initially refused to register the temporary residence permit and annulled it, stating that the company had not fulfilled the regulatory requirement of paying taxes in the amount of at least 3,300 euros per month for the incomplete first reporting year since the issuance of the temporary residence permit.

The attorney Kārlis Ešenvalds believed that the legislator has provided solutions for situations where a company’s reporting year is full or incomplete but has not provided regulation for the case of an incomplete month. With that it can be concluded that the legislator’s intention is to address different situations differently, namely – depending on the actual circumstances, whether the reporting period is full or incomplete. The legislator has divided an incomplete reporting year by months; therefore, in line with the legislator’s intent, an incomplete month should similarly be divided by days. The Senate in its judgment on June 14, 2023, admitted that from the conclusion of point 83 of the Cabinet of Ministers’ Regulation No. 564 “Regulations on Residence Permits” dated June 21, 2010, it can be inferred that to determine whether a company has paid taxes to the state budget in the prescribed amount, the entire period during which the foreigner’s residence permit was valid must be taken into account. Namely, the incomplete month should be taken into consideration if there has been a valid temporary residence permit for the foreigner, even if its validity did not start on the first date of the calendar month. Divide the incomplete month by days and calculate the sum that should be paid for one month’s day.

Attorney Kārlis Ešenvalds would like to point out another Senate’s quote in this case, that most notably impacted the positive outcome of the case and will most likely result in a complete change in the practices of the Office of Citizenship and Migration Affairs regarding the amount of tax to be taken into account. In particular, the Office of Citizenship and Migration Affairs maintained the position that only the amount of taxes credited to the state budget in the time period from 1 September 2018 to 31 December 2018 should be taken into account (only the time period of receipt of funds is taken into account).. On the other hand, Kārlis Ešenvalds held up the position that the inviting company pays taxes in accordance with the accounting regulations, therefore, the amount of taxes paid which is declared in the relevant period but paid later (the purpose of the money paid is taken into account – for the declared accounting period) should also be taken into account. The Senate’s judgment recognizes that there may be situations where the accounting month for which the tax is calculated is one month, but the due date for payment of the tax is in another month.. The Senate also noted that the procedure for declaring and paying Mandatory State Social Insurance Contributions is different, for example, from Income tax. Regarding the Mandatory State Social Insurance Contributions, the Administrative Regional Court rightly took into account the mandatory contributions paid on January 14, 2019, which were reported for December 2018. Thus, in this regard, the argument of the Office of Citizenship and Migration Affairs that the regional court improperly considered the tax payment made in 2019 is unfounded.

With the Senate’s judgment on September 25, 2024, in case No. SKA-588/2024, it was decided to deny the initiation of cassation proceedings regarding the appeal of the Office of Citizenship and Migration Affairs against the Administrative Regional Court’s judgment of March 19, 2024, which means that the aforementioned Administrative Regional Court’s judgment has entered into legal force.

Our office is pleased with this outcome, which not only protected the rights of the company but also created a significant precedent for other similar cases.

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