CJEU on deducting input VAT where reverse charge should have been applied (1/20/19) (0)

17.05.2019

Practice

On 11 April 2019, the Court of Justice of the European Union (CJEU) ruled on case C‑691/17 PORR Epitesi Kft. The CJEU examined whether the Hungarian tax authority had acted contrary to the VAT directive and VAT principles in preventing a customer from deducting input tax on an invoice issued under the general VAT scheme for a supply attracting domestic reverse-charge VAT. This article explores the CJEU ruling. Read more..

Working capital and its life cycle (1) (2/20/19) (0)

17.05.2019

Practice

Every company should be able to keep up its daily cash flows and have sufficient finances to cover its labour costs, taxes and trade payables as they fall due. Optimum working capital (WC) levels should be maintained in both the short and the long term. This article explores the concept and related matters. Read more..

Benefit test in transfer pricing analysis (3/20/19) (0)

17.05.2019

Practice

The benefit test is one of the key areas the State Revenue Service (SRS) will examine when reviewing intragroup services and assessing whether the costs of receiving such services are related to the taxpayer’s business. To prove that a benefit has been received from the service, it is important to take precautions for mitigating transfer pricing (TP) risks. The benefit test depends on facts and circumstances, so it is not possible to define intragroup services that are clearly treated as low or high value adding services. This article explores the benefit test and ways of checking whether a service has provided its recipient with any economic or commercial benefit. Read more..

SRS interprets PIT treatment of non-resident’s disposal of RE company (1/19/19) (0)

10.05.2019

Practice

In response to a binding ruling request from a non-Latvian tax resident individual, the State Revenue Service (SRS) has explained the personal income tax (PIT) treatment of a non-resident’s disposal of shares in a Latvian company with real estate in Latvia representing more than 50% of its assets (the “Latvian RE Company”). The ruling has been issued to a particular taxpayer and is not public, so it cannot be applied directly. This article explores the SRS findings about the PIT treatment in similar situations. Read more..

Changes in calculating duration of tax audit (2/19/19) (0)

10.05.2019

Passed

Recent amendments to the Taxes and Duties Act have changed the tax audit time limit rules. A tax audit that includes a transfer pricing review no longer has a time limit. There are also new rules for obtaining information during any period that is excluded from a tax audit, and a rule stating that the audit time frame excludes any period during which the taxpayer is preparing an opinion on the audit findings. Read more..