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 of the new law, the Ministry of Finance has prepared and submitted a project at the meeting of the State Secretaries of the Cabinet of Ministers on 11 October 2017.
The project and it annexes are available in Latvian here.
It includes seven attachments including various examples on:
- determining the tax base and assessment of taxable items for permanent establishment etc as Annex 1
prices of goods and services or definition of market value for transactions as Annex 2
of Corporate Income Tax of
non-resident as Annex 3
- non-application of Corporate Income Tax as per part 6 of the article 5 (low tax or duty free countries and territories) as Annex 4
- the tax base definition for payment to a non-resident etc other examples as Annex 5
- tax reporting template regarding income of a non-resident and paid tax in Latvia as Annex 6
- proof of income earned by a non-resident and paid tax in Latvia.
It is foreseen that the project will come into force on 1 January 2018 following approval by the Cabinet of Ministers. Hopefully, the taxpayers will find answers to all the currently unclear questions regarding application of the new law.