Filling corporate income tax declaration

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 tax consultants have broad experience consulting companies, dealing with tax law’s provisions, identifying tax risks and opportunities with regard deductible expenses and favorable tax treatment. Often companies require only minor assistance for improvement of accounting and operational records and documentation.

With regard to CIT declaration for year 2015, there are some changes, namely, with regard supporting information to be submitted.

The new rules for CIT declaration and estimation of CIT advance payments

Taking into account the amendments made in the law “On Corporate Income Tax”, CIT declaration and its attachments since year 2011, subsequently there is new Cabinet Regulation No 548 of 29 September 2015 on ‘’CIT taxation period declaration and calculation of advance payment’’ that came into force as of 1 January 2016.

Further, new regulation for filling CIT declaration foresees description and mathematical result for every line in comparison with the previous Regulation No 981 that was in force until 31 December 2015.

The new declaration shall be used for CIT calculation of the tax period that begins in 2015. CIT declaration form has been updated with new adjustment lines as well as there are lines deleted as per the CIT Law provisions no longer applicable i.e., amount for compensation paid or received in respect to losses transferred in the group (excluded from year 2014), relief on notional interest amounts (excluded from year 2014) and permissible deductible amount for increase of bad debt provisions i.e., below 20% of taxable income (excluded from year 2013).

CIT declaration’s Appendix No 4 “Overview of the loss transferred within a group, in accordance with the Article 14.1 of the CIT Law” is excluded, whereas the Appendix No 2 “Transactions with related parties (persons) for the taxation period” foresee that volume of supporting information shall be reduced.  Hereafter CIT declaration’s Appendix No 2 has to be filled by the taxable persons for transactions with related companies (persons) for price incompliant with the market value or for price corresponding to market value if value of transaction exceeds EUR 5 000.

Calculation arrangements and application of CIT advance payment remained unchanged.

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