The Corporate Income Tax (CIT) Act has been recently amended to bring in a new element of the tax base arising from hybrid mismatches. This article explains what hybrid mismatches are and how we identify them.

When it comes to applying the corporate income tax (CIT) provisions for penalties and donations in practice, we have to deal with the terms “state institution,” “government-funded establishment” and “state-owned company,” which are not defined in the CIT Act or in the rules explaining its application. In this article we explain these terms for CIT purposes.

A company’s shareholders in a general meeting may decide to pay a dividend once the annual accounts showing a profit have been approved. If the company’s articles of association provide for this, the Commerce Act permits an interim dividend to be declared and paid halfway through the financial year. This article explores the legislation and corporate income tax (CIT) treatment of dividends a Latvian branch pays to its foreign head office.