Estonia Latvia Lithuania Corporate income tax (CIT) rate CIT is payable upon profit distributions (the deemed profit distribution). CIT rate is 20%, calculated as 20/80 from taxable net payment. Regularly paid dividends are subject...
Read full article...While the previous year presented its fair share of challenges, Leinonen Latvia has maintained its position as one of the most highly acclaimed accounting consulting services in the region. In fact, the most recent client...
Read full article...Amendments to the Value Added Tax Law Amendments to the Value Added Tax Law (Amendments to the VAT Law) were adopted on 24 November 2020 which shall enter into force on 1 January 2021. Refund...
Read full article...To restrict the spread of COVID-19 in Latvia, from 9 November 2020 to 11 January 2021, emergency situation has been announced in Latvia and strict restrictions have been passed. Detailed information on restrictions is available...
Read full article...The Commercial Law of the Republic of Latvia prescribes that the articles of association of a capital company (Limited Liability Company or Joint Stock Company) along with the memorandum of association are the documents of incorporation...
Read full article...On June 11, 2020, the Court of Justice of the European Union (CJEU) adopted a decision in Case C-146/19 (SCT) concerning the right of a taxpayer to recover the paid VAT for a bad debt...
Read full article...On 24 June 2020, the Council of the European Union announced that it has passed amendments to the Directive on administrative cooperation in the field of taxation. According to these amendments, the EU Member States...
Read full article...As of 1 January 2021, significant changes on imposing VAT to e-commerce transactions had to become effective. The legislator has already drafted amendments to the Value Added Tax Law[1]. However, on 8 May 2020, the...
Read full article...As of 1st of July 2020 the scope of subjects who are obliged to report their ultimate beneficial owners (hereinafter – the UBO) under the Latvian Law on the Prevention of Money Laundering, Terrorism and Proliferation...
Read full article...On May 7, 2020 Amendments in the Law On Measures for the Prevention and Suppression of Threat to the State and Its Consequences Due to the Spread of COVID-19 (hereinafter – the Amendments) have been...
Read full article...On 12 March 2020, the Cabinet of Ministers of the Republic of Latvia declared emergency situation in the territory of the Republic of Latvia until 12 May 2020 to restrict spread of COVID-19 over the...
Read full article...On 24 March 2020, the Cabinet of Ministers adopted Regulations On Idle Time Benefits to Employees affected by the Spread of Covid-19 (hereinafter — “Regulations”). The Regulations stipulate the amount and procedure how the idle...
Read full article...In an effort to prevent further spreading of the Covid-19, a state of emergency was declared on March 12, 2020 in Latvia. In this situation companies face different challenges on how to organize employment related...
Read full article...In regard to spread of Covid-19, on 13 March 2020, emergency situation was announced in the Republic of Latvia effective until 14 April 2020. Some fields of national economy in the Baltic region face the...
Read full article...The article reflects the most significant steps to be taken, as well as explains the process of obtaining a temporary residence permit for foreigners in the Republic of Latvia for employment. Who is a foreigner?According...
Read full article...In transactions with non-resident legal persons it is necessary to ascertain whether the remuneration of the transaction is subject to the withholding of the corporate income tax (hereinafter — the CIT).The following payments to non-resident...
Read full article...VAT Law On 1 January 2020, amendments to the VAT Law become effective. Delivery of goods to a warehouse in the EU Member State.Value Added Tax Law (hereinafter — VAT Law) has been supplemented with...
Read full article...Amendments to the Law On Taxes and Duties The amendments of 13 November 2019 to the law On Taxes and Duties provide that the State Revenue Service (hereinafter – the SRS) has the right to...
Read full article...It is permitted to terminate employment contract only in the cases and in accordance with the procedure determined in the Labour Law. If the employee lacks adequate occupational competence for performance of the contracted work,...
Read full article...Pursuant to the Law on the Prevention of Money Laundering and Terrorism and Proliferation Financing the Register of Enterprises of Republic of Latvia (hereinafter - the “UR”) has already made a number of decisions on...
Read full article...On May 25th 2018 the Council of the European Union adopted Council Directive 2018/822 (Directive 2018/822) amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation in relation to reportable...
Read full article...Termination of employment relations is permitted only on the grounds and in accordance with the procedure as determined in the Labour Law. One of such grounds when employer can terminate employment relations is when an...
Read full article...What is the VAT group? Value Added Tax (hereinafter – the VAT) group is two or more taxable persons which has been established on the basis of a memorandum of association of the VAT...
Read full article...In this article, the procedure of applying Personal Income Tax (hereinafter – PIT) to the income of natural person–resident gained in transactions with financial instruments (i.e. bonds, shares, interest income, etc.) will be discussed. We...
Read full article...Several amendments to the Value Added Tax Law Coming into force in July 2019 From 1 July the reverse value added tax (VAT) procedure shall not be applied to services related to metal goods any...
Read full article...The Amendments to the Law on the Prevention of Money Laundering and Terrorism Financing (hereinafter — the Amendments), due to enter into force shortly, will provide significant changes in the regulation regarding disclosure of beneficial...
Read full article...Changes in cash transactions from May 1, 2019On April 3, 2019, the parliament adopted amendments to the law On Taxes and Duties relating to additional restrictions with regard to cash transactions. According to the aforementioned...
Read full article...On June 27, 2016 the Council of the European Union adopted directive 2016/1065 amending Directive 2006/112/EC regarding the value added tax treatment to vouchers. New voucher rules simplify and harmonize the value added tax (VAT)...
Read full article...On the 1st of May, 2019, the Whistleblower law enters into force in the Republic of Latvia. What is the purpose of the Whistleblower law? The purpose of the law is to promote public awareness...
Read full article...Increased threshold of mandatory social security and voluntary contributions from 55 000 EUR to 62 800 EUR (amendments in the article 14 (5) of Law “On State social insurance”)Personal income tax highest progressive 31,4% rate is...
Read full article...We are delighted to inform our clients and partners that Leinonen has expanded its coverage of Eastern European markets to include Belarus. Our Minsk office is brand new and fully owned by our parent entity...
Read full article...All companies registered in Latvia are obliged to submit information on their beneficial owners to the Register of Enterprises of the Republic of Latvia (the Register of Enterprises) until March 1, 2018.The obligation follows the...
Read full article...Let us remind on an exemption from taxation on the part of employer costs paid for staff catering up to EUR 480 per year (average EUR 40 per month) per employee in the Law "On...
Read full article...The Ministry of Finance has drafted amendments to the Law "On Taxes and Fees" which provides new requirements for transfer pricing documentation. It is expected that changes to the law will take effect as of...
Read full article...As we know, the new corporate income tax law will come into force on 1 January 2018. It foresees different tax calculation procedure and the tax base.In order to explain the application of the provisions...
Read full article...28 September 2017, Leinonen Latvia participated in the 7th annual conference Accounting Forum 2017 organised by the Association of Accountants of the Republic of Latvia (AARA). The conference gathers various organizations, companies, accountants, financial managers,...
Read full article...An important factor in a business development is effective advertising, networking with customers and partners and organization of various representative events. However, the correct and consistent classification of such costs in the company's accounting is...
Read full article...In this article, we will highlight the most important amendments to the Labour Law which came into force on 16 August 2017. Hourly salary rate. Until now, the procedure for calculating average earnings has been...
Read full article...Limited resources for small and medium-sized enterprises often limit companies to elaborate internal procedures for control of debtors. Moreover, the responsible staff may not know how to tackle situations when debtor has already terminated business...
Read full article...On 4 July 2017, the Cabinet of Ministers approved Regulations No. 397 "Regulations on the Report of the Group of Multinational Enterprises for Each Country" which foresee taxpayers to submit reports of multinational companies to the...
Read full article...In accordance with the amendments of Law “On Taxes and Fees" published, a new generation "Payment administration information system" (MAIS) or a single tax account will be introduced for tax payments on 1 January 2018....
Read full article...28 July 2017, the Parliament considered and adopted all the amendments planned within the tax reform including the new corporate income tax law. More on tax reform topics we enlightened in our news in April 26...
Read full article...Value added tax – the most risky tax. Information in the website of the State Revenue Service (SRS) on the results of tax audits carried out by the SRS for the first quarter of 2017...
Read full article...On 13 July 13 2017, amendments to the Commercial Law (hereinafter - the "Amendments"), which provide a new regulation regarding transactions between related parties of the company, will enter into force. The amendments are based...
Read full article...To reduce the shadow economy, there are amendments planned in the law "On Taxes and Fees" that provide electronic working time recording system for construction projects as of 1 October 2017. The stipulated regulation in...
Read full article...27 April 2016, the European Parliament and Council Regulation (EU) 2016/679 (hereinafter - the "Regulation") on the protection of processing of personal data and free movement of personal data repealing Directive 95/46 / EC was...
Read full article...On 18 May 2017, the draft amendments to Cabinet Regulation No.178 "Procedures for Application of Tax Relief Determined in International Agreements for Prevention of Double Taxation and Tax Evasion" ("Regulation No.178") have been announced in...
Read full article...While seeking ways to limit fraudulent practices, range of counterparties applying special VAT regime (VAT reverse) is being extended in Latvia. Nevertheless, the VAT reverse in domestic transactions between two Latvian VAT payers is applicable...
Read full article...In April 2017, the Cabinet of Ministers reviewed draft amendment of the law ''On Taxes and Fees" which foresee an obligation of taxpayers to submit a report, it structure, explanation of terms used of groups...
Read full article...It is planned that next week i.e., 3 May, the government will decide on the Latvian tax reform guidelines and further progress. As per the current government's position, changes in the law should be developed...
Read full article...1 April 2017, the amendments to the Law "On Excise Tax" were adopted establishing procedures for the movement of natural gas and excise duties for the calculation of the open natural gas market conditions and...
Read full article...According to the Commercial Law the merchant may temporary suspend its business activities for a period not exceeding 3 years by informing the Register of Enterprises and record it in the Commercial Register and the...
Read full article...End February 2017, the draft amendments of Labour Law were published that intend to revise remuneration of overtime amount, specify dismissal procedures of employee, competition restrictions application, critical remarks by employer or reprimand cancellation procedure,...
Read full article...As of 1 January 2017, amendments in relation to information to be provided to the State Revenue Service (SRS) on payments made to the non-residents have entered into force. According to the European Commission's requirements...
Read full article...This acquisition strengthens the business of Leinonen Group in Norway and increases the clientele. With this acquisition comes new personnel that bring deeper competences in Norwegian market. “It is great to gain deep local knowledge...
Read full article...There is very well known folk’ s wisdom that good life is just only where we are not living, and that the better way to understand is to compare. To understand how Latvia looks among...
Read full article...In Estonia, an amendment to the Income Tax Act has been made which allows employers to compensate employee health promotion expenses without income and social tax for 100 euros per quarter. The amendment will come...
Read full article...The amendments to Micro-enterprise Tax Law and the Law "On State Social Insurance" adopted last year that provided separation of the micro-enterprise tax (MET) from the national social security contributions (SSIC) and implementation of a...
Read full article...Along with the state budget for 2017 amendments to several tax laws, including the Law "On Corporate Income Tax" (the Law) has been adopted recently. We would like to inform about the most important changes...
Read full article...Amendments to PIT law As of 1 January 2016, several amendments to the law “On personal income tax” (‘PIT law’) will enter into force. Tax relief on catering expenses of employees The current regulatory framework...
Read full article...Micro-enterprise tax (MET) payers are now faced with a dilemma whether to maintain status of the taxable person next year or to waive it. The main reason for it is the amendments to the Law...
Read full article...Every company, regardless of its economic activity, can face a situation where the business has to be suspended for some time of period or ceased entirely. What should be done by owners and management of...
Read full article...According to the Latvian statutory regulations each company must prepare internal accounting organization documents. Its purpose and content are set in the regulation of the Cabinet of Ministers No 585 "Regulations on the accounting records...
Read full article...The preparatory actions of the 2017 budget have started including consultations on the draft amendments to the tax laws. Herewith, main amendments to the Value Added Tax (VAT) Law will be briefly outlined. The project...
Read full article...In the scope of active cooperation among Latvian, international and group companies, employees are posted to work in another country or vice versa. Issues related to personal income taxation and state social insurance mandatory contributions...
Read full article...The Cabinet of Ministers accepted proposal of the National Tripartite Cooperation Council (NTCC)[1] Budget and tax Subcouncil on the tax reduction for one of social guarantees of collective agreement - catering costs. The employees’ income...
Read full article...Since 1 September 2016, the Register of enterprises of Republic of Latvia accepts documents completed in the new technological format i.e., Portable Document Format- PDF. New technological format recognises the content of application form,...
Read full article...During State Secretaries' meeting, the draft amendments to the Law "On Taxes and Duties" (Tax Law) were submitted for the review providing taxpayer’s obligation to report suspicious and unusual transactions in the field of taxation...
Read full article...Since the beginning of this year, new rules for cash registers and cash systems have entered into force. The new rules were developed with the aim to introduce stricter technical requirements for use of cash...
Read full article...As of 1 July 2016, amendments to the VAT Law on special VAT treatment of cereals and industrial crops supplies have entered into force. Henceforward, consignee will pay VAT on domestic supplies if the transaction...
Read full article...A new Law on Annual Reports and Consolidated Annual Reports (hereinafter - the Law) has entered into force on 1 January 2016. It replaces the previous 2 laws - Law on Annual Reports and Law...
Read full article...VAT gap is undeclared and declared unpaid VAT amount ratio of potential VAT volume that would be calculated and charged if all taxpayers would fully meet tax obligations. According to the study[1] of the European...
Read full article...As of year 2017, the minimum charge from state social insurance contributions (SSIC) has been defined according to the amendments to the Law "On State Social Insurance". The aim of the new regulation is to...
Read full article...In order to improve the social security system Latvian Parliament has adopted the amendments to the Law "On State Social Insurance" at first reading on 5 May 2016. One of the planned amendments concerns transfer...
Read full article...A modernized EU Customs Code will enter into force on 1 May 2016. The elaboration of amendments involved several years and joint efforts of Member states. The amendments of the Customs Code are implemented with...
Read full article...Special application scheme for VAT, so-called VAT reverse charge mechanism on transactions on electronic goods i.e., mobile phones, tablets, laptops and integrated circuit devices including microprocessors and central processing units, shall enter into force according...
Read full article...Results of tax administration audits In accordance with information provided by Latvian State Revenue Service 55% of all taxes collected by Latvian tax authorities during tax audits in 2015 was value added tax (VAT). However,...
Read full article...Merchants often organize lotteries of goods and services to promote sales and attract new clients. Regulations for the lotteries are laid down in the Law On Lotteries of Goods and Services which states that a...
Read full article...Additions to information provided to State Labour Inspectorate (SLI) Currently, the employer posting an employee to work in Latvia is obliged to inform the SLI in written supporting relevant information and documentation. The proposed provisions...
Read full article...According to the amendments to the Cabinet Regulation No. 134 "Regulations on the electronic health information system" the required information on employee’s absence due to sickness will be available to the employers through Electronic Declaration...
Read full article...Preparations for submission of declaration of corporate income tax (CIT) for the previous tax year are soon approaching. It is worth considering involvement of tax consultants for preparation and/or review of CIT declaration. Leinonen Latvia...
Read full article...Why should new rules be adopted? The existing rules were adopted in 2001 and have become obsolete, because they do not reflect legislative changes which have entered into force in last decade. Besides, in practice,...
Read full article...The new law has been drafted according to provisions laid down by the Directive 2013/34/EU passed on 26 June 2013 by the European Parliament. Introducing principles of mentioned directive in the new law, administrative burden...
Read full article...Draft amendments of VAT Act include following changes:1) a tax exemption for cultural services as from 1 January 2016 applies only to the cultural services provided by public persons, individuals who have been delegated administrative...
Read full article...As per European Court of Justice (ECJ) and local court practice, the most common Value Added Tax (VAT) risk encountered by VAT payers in Latvia is VAT system complexity and counterparty failure in cross-border and...
Read full article...Currently, the Parliament is considering amendments to Micro-enterprise Tax Law ('Law'), which provide changes in tax rates and in other provisions, which, in turn, will affect the number of taxpayers in the near future.Restricted industriesOn...
Read full article...On 1 January 2013, came into force amendments to the Latvian law "On Personal Income Tax" (PIT Act), which provided for the payroll tax exemption for employee income received from rights to purchase employer’s shares....
Read full article...Since 13 August 2008 there is in force "Money Laundering and Terrorism Financing Prevention Act" (the Act) whose objective is to prevent financing of terrorism and money laundering. Like elsewhere in the world also in...
Read full article...The restriction of competition and social security If an individual receives a compensation for restriction of competition, it is subject to personal income tax and social security payments. The draft states that during the restriction...
Read full article...Not - declared salaries risk From July 1, 2015, taxpayers, who have been identified by Latvian tax administration’s (SRS) computerized system of risk analysis as payers of not- declared salaries (so - called “envelope” salaries),...
Read full article...On 26 May 2015 there were adopted the amendments to Cabinet Regulation No. 556 “Application of Rules of the Corporate Income Tax Act” (Cabinet regulation No.556) about the following. Determinated procedure for non-residents to prepare...
Read full article...VAT refund in the European Union (EU) is provided by Directive 2008/9/EC and Cabinet Regulation No.1514 - Procedures by which a Person Taxable with Value Added Tax shall Submit an Application for Receipt of a...
Read full article...Application of transferpricing and market price principle Transfer price is a price (value) that is applied in a transaction between related parties, namely, between Latvian taxpayer and its related foreign company within the meaning of...
Read full article...Amendments to the Law on Vehicle Operation Tax and Company Car Tax will come into force on 1 January 2016 and includes a number of clarifications in the tax administration, as well as additional exemption...
Read full article...1. Income from credit reduction or repayment Until now, the tax was not imposed on an individual's income received by reducing or repaying individual’s mortgage credit assumed by the individual until 1 January 2009 and...
Read full article...1. Increased fines on unfair commercial practice On 1st July amendments to the Unfair Commercial Practice Prohibition Law will come into force, expanding the rights of the Consumer Rights Protection Centre and other supervisory authorities in...
Read full article...Merchants, who issued loans to individuals, including their employees, are obliged to submit information to the State Revenue Service (SRS) by 1 June about loans, exceeding 15 000 euros which have been granted to the...
Read full article...Amendments to the Cabinet Regulation No. 178 “Procedures for Application of Tax Relief Determined in International Agreements for Prevention of Double Taxation and Tax Evasion” have come into force starting from 1 May 2015. ...
Read full article...Given that value added tax (VAT) provides about half of the total tax revenue of the State budget in Latvia, but at the same time, the amount of VAT fraud in the country is high,...
Read full article...The amendments to the Law On the Vehicle Operation Tax and Company Car Tax are being prepared for the third Parliamentary reading. They include a number of clarifications in the tax administration and the application...
Read full article...The draft regulation was developed on the basis of the Law “Amendments to the Law “On Taxes and Fees”” adopted by the Saeima on 17 December 2014 (entered into force on 1 January 2015). Law...
Read full article...In March 2015 the Latvian State Revenue Service (SRS) has published VAT guidelines "For determining the place of supply of real estate related services". SRS instructions do not include references to the legislation on the...
Read full article...Micro-enterprise tax law provides that starting from 1 January 2015 micro-enterprise tax rate for micro-enterprise turnover exceeding EUR 7000 is increased from 9% to 11%. However, on 5 February 2015 the Saeima approved in the...
Read full article...The draft law of the Annual report and Consolidated annual report has been developed and published. It must be approved by 20 July 2015, as provided for in European Parliament and Council directive 2013/34/ES on...
Read full article...Although initially, the Cabinet of Ministers decided that the procedure for the use of electronic devices and equipment for tax and other payment registration and technical requirements for these devices and equipment will come into...
Read full article...The seminar will take place on February 23, from 10.00 to 13.00. Entrance fee - € 25. On the seminar venue we will inform you separately.During the seminar we will discuss the following questions:• The...
Read full article...This has already happened: Latvia was invited to join the Eurozone by the European Union in the summer of 2013. The exchange rate was confirmed to remain the fixed EUR 1 = LVL 0,702804. Latvia...
Read full article...Registered equity, Articles of Association, the Shareholders Register and the Register of Enterprises after the introduction of Euro in Latvia There are two parallel processes which every company has to consider and to finalise after...
Read full article...Forthcoming changes in the personal income tax law in Latvia According to the draft law the following changes will take place on the 1st of January 2014, or if so mentioned, on a later date....
Read full article...If an employee’s occupational code has changed, the employer must submit information to the SRS about the new occupational code within the next month.For employees registered with the SRS by their employer before 30 June...
Read full article...Specific due dates for the issue of invoices have been provided for: 1) An invoice in respect of a transaction carried out in Latvia shall be issued within 15 days of the transaction date or...
Read full article...If a taxpayer provides both taxable and non-taxable supplies, the new VAT Act primarily provides for the keeping of separate accounting for the purposes of input tax deduction. Pro-rating shall only apply in cases where...
Read full article...As of 1 January 2013, a cash or non-cash advance issued to employees, board members, council members, shareholders or members will be treated as employment income if the advance or a part thereof is not...
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