In recent years, information requests issued by the State Revenue Service (VID) to taxpayers have gained increasing importance in tax administration practice. They can no longer be regarded merely as a formal preparatory step within a potential administrative procedure; rather, they often function as an intensive instrument for establishing facts, giving rise to practical and legal questions regarding the scope of such requests, their justification, and their impact on personal data protection. In this context, the boundary between lawful information requests and state interference which, by its content and scale, effectively resembles a tax audit or inspection becomes particularly relevant.
An important reference point in defining this boundary is the judgment of the Court of Justice of the European Union of 24 February 2022 in Case C‑175/20, which assessed the right of tax authorities to request extensive volumes of personal data from online platforms and the compliance of such actions with the principles of the General Data Protection Regulation. The CJEU clearly emphasized that, even for the purposes of tax administration, the right of public authorities to request information is not absolute and is subject to the principles of proportionality, necessity, and data minimization.
Within the Latvian legal framework, these findings have been consolidated and further specified by the decision of the Administrative Cases Department of the Senate of the Supreme Court of the Republic of Latvia of 27 October 2025 in Case No. 680039424, SKA‑324/2025. The Senate explicitly recognized that a VID information request which imposes an independent obligation on a taxpayer and provides for adverse consequences in the event of non‑compliance produces direct legal effects and is therefore subject to judicial review. At the same time, the Senate noted that, in such disputes, the court must examine the lawfulness, proportionality, and absence of arbitrariness of the request, without interfering with the authority’s discretion regarding the selection of evidence.
The combined effect of this case law requires taxpayers and practicing lawyers to critically assess VID information requests, rather than relying solely on their formal designation. Consequently, the key issue becomes identifying the circumstances in which an information request is mandatory and those in which it may be challenged as legally unfounded or disproportionate.
The following sections provide an analysis of the CJEU judgment in Case C‑175/20 and the relevant case law of the Supreme Court of the Republic of Latvia, examine the legal nature of VID information requests, and set out criteria enabling taxpayers to protect their rights in a lawful and proportionate manner.
1. Legal Analysis – CJEU Judgment C‑175/20
The CJEU judgment emphasized that public authorities, including VID, are entitled to request personal data for the performance of legally defined functions, such as tax administration. However, any such request must be assessed in light of the GDPR principles, in particular:
-
data minimization and purpose limitation (Article 5 GDPR);
-
lawfulness and necessity (Article 6 GDPR);
-
the principle of proportionality (Article 23 GDPR).
1.1 Principle of Proportionality
The Court indicated that the scope, content, and duration of the requested data must not exceed what is genuinely necessary to achieve the specific objective pursued. For example, a request seeking information on all advertisements irrespective of the focus or time period of the investigation may be regarded as disproportionate and as unduly restricting the rights of individuals.
The judgment further stressed that proportionality must be assessed on a case‑by‑case basis, taking into account the purpose and scope of the specific request. This means that VID may not request extensive datasets on a purely formal basis if part of the data is not necessary for the particular investigation.
2. VID Competence and the Role of Information Requests in Tax Administration
The State Revenue Service is a public authority competent for tax administration, tax inspections, and tax audits. These functions are exercised within statutory procedures that provide for defined procedural frameworks, deadlines, and mechanisms for the protection of taxpayers’ rights.
At the same time, tax administration also makes use of information requests, the purpose of which is to obtain data or explanations not already available to the authority. By its legal nature, an information request is not identical to a tax inspection or audit and does not, in itself, constitute the initiation of an administrative procedure.
In practice, however, the boundary between an information request and the de facto conduct of a tax inspection or audit is not always clear. Where an information request, by its scope, level of detail, or consequences of non‑compliance, goes beyond mere fact‑finding, it may impose a burden on the taxpayer comparable to that of a formally initiated inspection or audit. In such cases, an assessment of the lawfulness and proportionality of the request becomes particularly important.
This distinction is essential, as it determines both the challengeability of the request and the extent of the taxpayer’s legal protection.
3. When an Information Request Is Challengeable
An information request may be challenged only where it is mandatory for the addressee and where failure to comply may result in adverse consequences, such as administrative penalties, suspension of economic activity, or removal from the VAT register. Requests that are purely informative or issued for the purpose of hearing the taxpayer do not, in themselves, produce legal effects and are therefore not subject to challenge.
An information request is also considered challengeable where:
-
it exceeds the competence of the State Revenue Service;
-
it requires the processing of personal data in violation of applicable legal provisions;
-
its content is insufficiently specific, clear, or reasoned.
In addition to the principles established by the CJEU in Case C‑175/20, the case law of the Administrative Cases Department of the Senate of the Supreme Court of the Republic of Latvia plays a significant role in assessing the lawfulness of VID information requests.
By its decision of 27 October 2025 in Case No. 680039424, SKA‑324/2025, the Senate clearly recognized that a VID information request imposing an independent obligation on a taxpayer and threatening adverse consequences in the event of non‑compliance (including suspension of economic activity, removal from the VAT register, or the imposition of an administrative penalty) produces direct legal effects and is challengeable before a court as an administrative act.
At the same time, the Senate emphasized that the court’s task in such disputes is not to replace the authority in the exercise of its discretion or to conduct an in‑depth assessment of the usefulness of the requested information for a potential administrative procedure. The scope of information and the selection of evidence are, in principle, within the authority’s competence. However, the court is required to verify whether the specific information request:
-
was issued within the authority’s competence;
-
complies with personal data protection legislation;
-
is sufficiently clear, specific, and reasoned;
-
does not display elements of arbitrariness.
The Senate further noted that the court may and must assess the proportionality of the request, including in cases where an information request issued prior to the initiation of an administrative procedure, by its scope and intensity, effectively resembles a tax inspection or audit regulated by law.
4. Conclusions
-
The right of public authorities to request information and personal data is not absolute and may be exercised only within the limits set by law and the principle of proportionality.
-
An information request imposing a mandatory obligation on a person and providing for adverse consequences in the event of non‑compliance constitutes an administrative act and is subject to judicial review.
-
When examining such disputes, the court is not required to assess the usefulness of the evidence chosen by the authority, but it is obliged to verify the lawfulness, proportionality, and absence of arbitrariness of the request.
-
The case law of both the Court of Justice of the European Union and the Supreme Court of the Republic of Latvia reinforces the principle of balance between the state’s fiscal interests and the individual’s fundamental rights to lawful and fair processing of personal data.
5. Case Law Cited
-
Judgment of the Court of Justice of the European Union of 24 February 2022 in Case C‑175/20.
-
Decision of the Administrative Cases Department of the Senate of the Supreme Court of the Republic of Latvia of 27 October 2025 in Case No. 680039424, SKA‑324/2025.
©INNOVATOR 17.12.2025.
