How do you describe the current business environment in the country? Are any new tax rate or legislation changes influencing it? If so, how?
There are changes in legislation every year in Latvia. This year started with changes that influence daily business of many companies operating in the Latvian market.
Although most of the tax rates are kept on a level of previous years (Personal Income tax with a flat rate – 23%; CIT tax – 15%; Microenterprise income tax – 9%), the object and methods of taxation have changed. For example, the maximum amount for payment of state social insurance compulsory contribution in 2016 is set at EUR 48,600, on a level of year 2015, but income exceeding the said maximum amount in 2016 will be subject to the solidarity tax.
Mentioned before the solidarity tax, the employer and the employee is obliged to pay a solidarity tax on income above the stated maximum amount if the employee's income exceeds the maximum amount of social contributions. The tax is calculated in accordance with the rates stipulated by the Law "On State Social Insurance". In general, the employer rate is 23.59% and employee rate is 10.5%.
Another change that influences entrepreneurs operating in Latvia is the amendment to the Law "On Taxes and Fees" providing that the board members are personally liable for the tax debts of legal entities since 1 January 2015. The liability can be extended to legal persons with late tax payments accrued after 1 January 2015.
What are the biggest benefits for companies to enter the market in 2016?
For businesses in any industry, there are significant advantages. For example, well-educated multinational labour force, 70% of people under 40 speak English, competitive infrastructure (Riga Airport is the largest airport in the Baltics), well-developed banking sector and fastest internet connection in the world.
What are the key goals for Leinonen in the market in 2016?
We see our role in supporting small and big foreign companies which made a decision to do a business in Latvia, providing them professional service and offering valuable proactive advice. Together with our clients, we develop every day, becoming more professional, service-oriented, effective and innovative.Entrepreneurs working on the Latvian market should be aware of the frequent changes in legislation. Our clients feel secure by receiving information always on time.
Once per month we will send you an article keeping you up to date with the latest trends and developments in accounting, taxation or legal fields.