Since 2020, companies have been under pressure to adapt to the ever-changing business landscape, which keeps serving up a variety of disruptions. It’s become clear that the ability to effectively respond to the changing conditions is crucial for any company.
On 12 September 2023 the European Commission published its proposal for a transfer pricing (TP) directive to align TP requirements across the EU. While most of the member states, including Latvia, are to some extent applying recommendations made by the OECD TP guidelines, the European Commission is proposing the directive and calling on the member states to adopt the same TP standards in order to secure a level playing field. If the new rules are approved in their current version, they will be passed into the member states’ national law by 31 December 2025 and applicable from 1 January 2026.
We have written before about the directive on the multinational enterprise (MNE) group’s public country-by-country report (CbCR) and how this is being passed into the national laws of EU member states. In this article we will look at Latvia’s progress in passing the directive and find out what aspects Latvian taxpayers need to consider and what issues and challenges they may face.
A directive requiring multinational enterprise (MNE) groups to prepare public country-by-country reports (“CbCR”) was published in the EU Official Journal in December 2021. The member states had until 22 June 2023 to pass the directive into their national laws. In this series of articles we will look at the progress made by Latvia and other member states and will explore the directive’s history, goals, potential benefits and taxpayer challenges.
The Cabinet of Ministers is expected to approve a bill amending the Anti Money Laundering and Counter Terrorism and Proliferation Financing (AML/CTPF) Act. Although the bill has yet to undergo parliamentary review and may therefore be modified, we suggest you familiarise yourselves with the proposed changes, as they will significantly affect persons governed by the AML/CTPF Act that make foreign exchange cash purchases or sales, and legal arrangements, including trusts.
As the Year of Knowledge begins, we are opening registration for the 16th season of our “Tax Foundation Course”. This is a training programme created by PwC Latvia experts that invites people with various backgrounds to become familiar with the Latvian tax system and learn how to apply taxes properly under the direction of highly qualified and experienced lecturers. This programme has been completed by more than 1,100 company representatives and individuals wishing to enhance their understanding and consolidate their knowledge of tax matters.
Latvia’s current transfer pricing (TP) rules came into force back in 2018, bringing changes to the structure of TP documentation (TPD) and to materiality thresholds that require taxpayers to prepare a specified form of TPD. Many taxpayers are still confused about the right way to measure the amount of a controlled financial transaction, which results in an obligation to prepare, or to prepare and file, a specified form of TPD if the taxpayer has no other types of controlled transactions. This article explores the procedure for determining the controlled transaction amount (CTA) for various types of financial transactions according to Latvian TP rules and international law, as well as looking at the practice in Lithuania and Estonia, the most similar economies to Latvia.
The Corporate Income Tax (CIT) Act requires companies to include their non-business expenses in the taxable base for a particular tax period. Since the tax period is one month, various situations can have you confused about the right period to report such expenses. This article examines four different situations.
In a market with growing business pressures and increasingly intense competition, companies are looking for ways to optimise their resources and stay competitive. Outsourcing the accounting function is a good solution that offers many advantages, while at the same time posing challenges and risks. This article explores the advantages and disadvantages of an external accountant to help companies better understand this option and make an informed decision about taking it.
The current economic challenges, such as high inflation, scarce resources and pressures to increase profitability, continue pushing businesses towards a global dilemma: either motivate your workers to stay on with a pay rise and then say goodbye to your profit, or cancel your plans for higher pay and perks and then lose skilled workers. This dilemma might have you looking for some more efficient types of employer’s financial support with a low or no tax burden, such as non-taxable fringe benefits. This article offers an overview of exempt fringes and other useful tools employers can use to support their workers in the Baltic States.
Businesses often undergo changes during their lifetime as the national economy and legislation also keep evolving. Latvian reorganisation procedures had remained essentially unchanged for quite a while. Effective from 1 June 2023, the Commerce Act has been amended to change the procedures for conducting national and cross-border reorganisations of commercial entities. These amendments are quite extensive, so this article explores just a few aspects of changes to the national reorganisation procedures.
The world has changed magnificently over the last 100 years as technological progress and democratic principles have made society more open-minded, tolerant and equal. As these things move forward, there are still social challenges that need to be taken care of. The gender gap remains a relatively stable phenomenon to this day, even though females have gained equal rights with males. In 2010, social entrepreneurs established The EQUAL-SALARY Foundation, a non-profit organisation, to fight for pay equity around the world. In words that are easy to understand, the Foundation presents data from the International Labour Organisation’s Global Wage Report 2018/2019, which states that globally women are paid 20% less than men on average. In the light of publication of the EQUAL-SALARY Foundation’s annual report, we summarise key takeaways.