From 1 January 2022 companies investing in a closed alternative investment fund will be allowed to exclude from their tax base any income the fund earns when selling shares in a company it owns, according to amendments to the Corporate Income Tax (“CIT”) Act effective from 20 April 2021. This article explores the rules and how this treatment could affect the fund’s investment disposal strategy.
In last week’s edition of Flash News we outlined the VAT treatment of companies offering free meals to their workers during working hours as well as transport between home and work to ensure business continuity especially during the Covid-19 crisis. This article explores the personal and corporate income tax implications of this practice.
To mitigate the adverse effects of the Covid-19 pandemic, amendments to the Covid-19 Act were adopted by Parliament on 18 March and came into force on 20 March 2021. This article explores changes in how individuals file their annual income tax return and how taxes are calculated.
A non-resident company that allocates various expenses to its permanent establishment (“PE”) in Latvia might wonder whether the PE can fully deduct all those expenses for corporate income tax (“CIT”) purposes. This article explores the non-resident’s staff cost allocations to the PE.
Latvia has not yet lifted the emergency situation declared because of the Covid-19 pandemic. We have written earlier about a few aid measures available under the Covid-19 Containment Act to businesses affected by the crisis. There are also some other aid measures available, including grants for current assets. This article explores how the aid programme has been adjusted for this purpose.
This article explores hybrid mismatches, ways of identifying them, and a few practical aspects. Hybrid mismatches are basically differences in how a company or an instrument is taxed under the laws of two or more countries. An identified mismatch is eliminated by denying a deduction or by adding the amount to taxable income.
The Corporate Income Tax Act provides for taxing a company’s profits when they are distributed, i.e. dividends are part of the taxable base. Yet the wording raises some practical questions. This article explores how the timing of a dividend calculation affects the period in which the profit distribution should be reported on the tax return.
Christmas is a pleasant time of exchanging presents. This season too, companies would like to give presents to their staff and business partners. This article explores their tax treatment. In the emergency circumstances, we will not be discussing “staff sustainability” events such as Christmas parties for employees and their children. We will come back to this topic next year once the epidemiological situation has hopefully improved.
Although Latvia has again announced a Covid-19 emergency situation from 9 November, aid measures are available under the Covid-19 Act effective from 10 June. This article explores how the Act governs the corporate income tax treatment of gifts and donations in 2020.
In September 2020 the State Revenue Service published an updated version of “How to complete the corporate income tax return.” In this article we summarise information on what has changed, and we look at some new examples offered by the SRS in explaining CIT treatment.
We wrote a while ago about available corporate income tax (“CIT”) reliefs, including the possibility of deducting provisions made at the end of 2017 from taxable income. This article explores the CIT treatment and issues around a bonus expense accrued at 31 December 2017.