This article wraps up what we wrote last week about the obligation to pay corporate income tax and payroll taxes when doing business abroad.

Publicly available information on Latvian companies growing their exports or launching business abroad is always welcome, yet they have to meet foreign administrative requirements, including legal issues (work safety, employment, permits and registrations) as well as accounting and taxation. This article explores the obligation to pay foreign corporate income tax (“CIT”) and employee taxes potentially facing a Latvian company. VAT rules are usually assessed separately and a VAT registration requirement can arise where there is no obligation to register for other taxes, hence no VAT comments here.

Collective agreements are a rare occurrence in Latvia, yet they can lay down employment terms such as minimum pay, extra pay and social guarantees applicable to a company in a given industry. These conditions can be enforced whether or not the employer belongs to the main group of employers, so each industry needs to monitor how the social dialogue between employers and workers is progressing. This article explores the significance of collective agreements and their key terms.

The results of a tax audit tend to come as a nasty surprise for the taxpayer. If challenging the tax decision has failed to bring a favourable solution and the option of litigation is not acceptable, the taxpayer can consider reaching a settlement with the SRS to minimise the adverse effects of the tax decision on the taxpayer’s business or financial position.

This article completes what we wrote last week.

Revenue recognition is one of the trickiest challenges, especially in a transaction involving two or more parties. When it comes to recognising revenue in such transactions, companies often have questions. Is the full invoice amount my revenue? Am I an agent? This article explores what legal provisions should be applied in order to answer these questions.

On 9 July 2020, the meeting of state secretaries debated proposals for amending the Cabinet of Ministers’ Rule No. 178, How to claim tax relief under international double tax treaties. The proposals aim to improve the process of tax administration and to ease the administrative burden by promoting electronic exchange of information with the State Revenue Service (“SRS”). This article explores what we see as key changes.

The topic continued from MindLink.lv news 24.07.2020. Based on EU and Latvian legislation, in 2019 the Financial Intelligence Unit drew up guidelines, describing methods for identifying politically exposed persons (“PEPs”).

On 2 July 2020, the Court of Justice of the European Union (“CJEU”) ruled on case C-835/18 (SC Terracult SRL). The dispute was over the tax authority’s refusal to allow a taxable person to adjust invoices after the tax authority had completed a tax audit and assessed an additional tax liability, thus denying the taxable person’s right to a tax refund. The tax authority’s decision was final because the taxable person had accepted it. The taxable person sought to adjust invoices on the basis of new facts which were not known when the tax authority made the decision and which resulted in reverse-charge VAT being applied to the underlying transactions.

A multinational enterprise’s intragroup transactions are not limited to goods and services. The group members can also deal with intangible property (“IP”), for example, transfer IP for a consideration (change of owner), grant the right to use IP in whole or in part, or use various types of agreements for reimbursing IP costs. This article explores IP and relevant agreements as well as the concept and purpose of a cost contribution arrangement.

In times of adverse and significant events, such as a war, crisis or pandemic, there is a certain group of people that will try to exploit the national emergency situation in their own interests. It is no surprise that this phenomenon has now surfaced in response to the global outbreak of COVID-19. At the very outset of the pandemic, cybersecurity companies and news agencies repeatedly warned us about an increase in phishing attacks, with people receiving virus reports from authorities such as the WHO enticing them to download malware on their devices.

Self-isolation and quarantine as well as closed borders have made life complicated for so many of us. One of the questions is how to ensure legitimacy for documents signed remotely. For example, it might be difficult to forward documents by post between countries and to obtain a notary attestation and an apostille on documents. This article explores some of the available options for electronic signing of documents remotely in Latvia and elsewhere.

Governments and health supervisory agencies around the world have launched an all-out fight against COVID-19, but more needs to be done. Several countries have quarantined millions of people, and if the situation deteriorates, more countries might follow suit. COVID-19 has become a serious risk for the Latvian economy as well as globally.

On 9 January 2020, Parliament debated proposals for amending the Taxes and Duties Act in their first reading. The proposals include important changes relating to how applications and tax returns should be filed with the State Revenue Service (SRS).

We have lately heard that it is advisable to register your company as a person subject to the Anti Money Laundering and Counter Terrorist and Proliferation Financing (AML/CTPF) Act rather than receiving a letter from the State Revenue Service (SRS) warning that they are about to examine your system of internal controls, which does not exist. This article explores how much of this talk is true.