The Covid-19 pandemic has thrown the global economy into recession. However, the warning issued by the industry experts and backed by the authors of a World Bank study that the economy will experience a rapid increase in the number of insolvency proceedings and legal protection proceedings (LPP) at the end of Covid-19, has not come true as yet. This is because the financial difficulties brought on by the pandemic were countered with an unprecedented government intervention in the market and a huge package of financial aid, including working capital grants and idleness benefits. The economic downturn is now being aggravated by Russia’s invasion of Ukraine, as the consequences of the war are pushing up energy prices and fuelling price rises in general, inevitably leading to debt crises. Latvia seems likely to face an inevitable wave of insolvencies and LPPs, so this article aims to introduce companies to Latvian in-court and out-of-court LPP in simple terms in order to highlight the characteristics of these debt restructuring tools, as well as the role of the debtor, the creditors and the supervisor within these proceedings.
In last week’s article on the guidance issued by the State Revenue Service (SRS), we looked at the first two of five key factors the SRS highlights as noteworthy in transfer pricing (TP) determinations for periods affected by the pandemic. This article explores the remaining three factors that are no less important.
The world and things keep changing, and this change is affecting the environment significantly – both positively and negatively, allowing and even forcing us to revise various processes and activities to make them consistent with the reality. These factors are also affecting transfer pricing (TP).
With the labour market crossing national borders, Latvian employers are looking abroad to attract not only management talent but also routine workers. As the Covid-19 crisis lingers on and the significance of remote work grows, Latvian companies are increasingly wondering about the best ways to employ foreign workers, especially if they work remotely from their home country.
We have already informed our MindLink subscribers that every company needs to update its accounting policy because the new Accounting Act effective from 1 January 2022 is replacing the old Accounting Act of 1993. This article explores what material changes the accounting policy needs to describe and what purposes it serves.
The Corporate Income Tax (CIT) Act has been amended only slightly during 2021, as we wrote in our Flash News edition of 20 April 2021. This article explores the latest changes to the CIT Act as well as amendments being proposed for the near future, including the long-awaited rules for bad debt provisions under IFRS 9 Financial Instruments.
To mitigate the economic impact of Covid-19, the government is supporting the private sector with various measures that financially help businesses cover some of their short-term losses. Yet it is very important for the businesses to see opportunities for future growth, which often comes down to the availability of financing for development, improvements and conquering new markets.
The year 2021 and the current macroeconomic cycle have brought a number of adjustments and uncertainty about the future to households (private consumers), businesses of various sizes, and policymakers. Covid-19 and related paradigm changes, the risk of recurrent pandemic, disrupted logistics and supply chains, and other factors create substantial risks affecting companies’ ability to stay in business and grow. This article explores common causes of financial distress and debt restructuring tools, including how companies can reach an agreement with the State Revenue Service on paying taxes.
The Covid-19 pandemic has also affected risk assessment and decision-making processes in organisations. As the pandemic and restrictions ease off, organisations should revise these processes and make any necessary changes.
CEOs and workers are increasingly embracing remote work. CEOs plan to invest more in order to support adoption of the hybrid work model. Workers are not so eager to return to the office as their managers. CEOs face difficult decisions about using office space. These are just a few of the issues and findings from a recent PwC survey.
Retailers and consumers have been recently forced to change their product distribution and shopping habits. The online marketplace is evolving and gaining unprecedented momentum. PwC’s June 2021 Global Consumer Insights Pulse Survey shows that the Covid-19 pandemic has created new consumer groups. Their creation is driven by consumer attitudes and behaviours, which have a great potential to significantly impact how consumers choose their shopping channels, goods, and brands.
Every company must have an accounting policy in place that specifies its accounting principles, as well as laying down rules for how its financial statements should be prepared and how its internal documents should move around. The accounting policy must fit the nature of the company’s business.
If an individual is considered to be tax resident simultaneously in two treaty countries (e.g. Latvia and Lithuania) according to their national law, the dispute over the person’s tax resident status will be resolved by treaty article 4(4), which provides for consecutively assessing the following criteria:
When starting a new business, it can be a challenging task to establish a sustainable financial infrastructure from the very beginning. For the investors focusing on start-ups, one of the most difficult tasks is determining how to price the investment.
E-commerce businesses making cross-border supplies of goods and services to consumers in the EU as well as electronic interfaces facilitating those supplies are advised to evaluate how the expected VAT changes affect their VAT registration and compliance requirements.
The new rules are rather complex and require a detailed analysis to assess their impact and conditions for implementing them. We have put together the most critical changes affecting a number of e-commerce businesses.
Effective as of 1 July 2021.
If a stock option awarded to an employee does not meet the criteria for the tax favoured treatment and is consequently taxable at vesting, the Latvian employer is liable to report the award for personal income tax (PIT) and national social insurance contributions (NSIC) purposes and ensure taxes are paid.