CIT

11.12.2020

Santa Claus coming on duty (3/50/20)
Social insurance Tax CIT PIT

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.
26.11.2020

CIT on gifts and donations to mitigate Covid-19 consequences (2/48/20)
Tax CIT

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.
12.11.2020

Changes to SRS guidance “How to complete CIT return” (2/46/20)
Tax CIT

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.
30.10.2020

Bonus accrual: corporate tax treatment (2/44/20)
Tax CIT

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.
09.10.2020

Ways of utilising tax losses arising before 2018 (2/41/20)
Tax CIT
While the current corporate income tax (“CIT”) regime no longer recognises the concept of tax loss, the transition rules of the CIT Act allow companies to deduct tax losses arising before 2018 from the CIT charge on dividends, but this relief is available up to 2022. Let’s explore some aspects to consider before you can claim it.
24.09.2020

How to utilise old profits free of corporate tax (1/39/20)
Tax CIT
Companies having large pre-2018 retained earnings available for distribution in dividends free of corporate income tax (“CIT”) are at an advantage because CIT costs can be reduced not only on profit distribution but also in other cases. This article explores some additional ways of utilising the “old” profits and mentions a few points to consider.
17.09.2020

Corporate tax treatment of zero-balance cash pool (2/38/20)
Tax CIT
The corporate income tax (CIT) treatment of cash pools is a grey area when it comes to measuring the company’s taxable base. The State Revenue Service (SRS) has still to publish guidance on various situations potentially facing cash pool members in order to make the tax authority’s opinion on this issue crystal clear. This article explores how the CIT treatment of zero-balance cash pools is interpreted in an advance tax ruling the SRS has issued to a PwC client.
11.09.2020

Car used under employment contract (3/37/20)
Tax Car tax CIT

Company employees often use their private cars for business purposes. This article explores issues to consider and tax implications of this use being included in employment contracts.
04.09.2020

Arm’s length principle in non-resident’s transactions with permanent establishment in Latvia (2/36/20)
Tax CIT
A non-resident foreign entity wishing to start business in Latvia is likely to face the question of whether to incorporate a subsidiary or open a branch or a permanent establishment (“PE”). To answer this question, the foreign investor should evaluate various legal, administrative and tax aspects. This article explores how profits are allocated to the PE, an aspect that can play a decisive role in making this decision.
20.08.2020

Payments to non-residents (3/34/20)
Tax CIT
The Corporate Income Tax (“CIT”) Act requires Latvian residents (other than individuals) and permanent establishments to withhold tax on certain payments made to non-residents. This article explores key aspects of the withholding tax treatment.
07.08.2020

Procedures for obtaining residence certificate to be amended (2/32/20)
Business Tax CIT
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.
17.07.2020

Corporate income tax treatment of security deposits (2/29/20)
Tax CIT
The Corporate Income Tax (“CIT”) Act prescribes a 12-month time limit, within which a prepayment does not become a deemed profit distribution. This article explores whether the landlord’s tax base should include a security deposit that was received when entering into a tenancy agreement and will be refunded at the end of the tenancy.
10.07.2020

Exit tax: scope and treatment (2/28/20)
Tax CIT
Recent amendments to the Corporate Income Tax (“CIT”) Act, transposing Council Directive (EU) 2016/1164 of 12 July 2016 and Council Directive 2017/952 of 29 May 2017 amending Directive (EU) 2016/1164, have introduced a number of new provisions. This article takes a look at exit tax, which is regulated by many of the new provisions.
18.06.2020

Corporate income tax relief (2/25/20)
Tax CIT
The CIT Act offers a variety of reliefs that taxpayers may claim if they have a taxable base that qualifies for a particular relief. This article explores some of the available CIT reliefs.
11.06.2020

Company liquidation is governed by Commercial Code but tax laws also come into play (3/24/20)
Tax CIT
Thousands of companies go out of business in Latvia each year. If a company’s shareholders no longer wish to stay in business, they can decide to wind the company up. In certain circumstances, liquidating a company results in its shareholders being entitled to surplus assets (a “liquidation quota”) creating extra income. This article explores some of the tax implications for a liquidated company’s shareholder receiving income from a liquidation quota, which may differ considerably if the shareholder is an individual or an entity.
Page
from 15

Topical

Read more
21.06.2023

What should you think about if you want to move to Latvia?

Tax resident status prescribes a personal income tax (PIT) liability on your worldwide income in your tax residence country. You should carefully assess your tax resident status to avoid potential double taxation, if the tax authorities of two countries treat you as their tax resident.
17.03.2023

Nasdaq welcomes PwC as a certified adviser on First North

“By working closely with multiple executives and shareholders of both private and State-owned corporates, we have observed an increasing interest about the capital markets. Business leaders have become more ambitious and better aware of the myriad of benefits from attracting capital via the exchange. At PwC, we are confident that First North Certified Adviser status will allow us to provide a more diversified advice for our clients in the Baltic region and help navigate them in the journey of an intensified capital market activity,” highlights Raimonds Dauksts, Head of Advisory at PwC Latvia.

First North is a growth market designed for ambitious small and medium-sized companies in the Baltics. Being a Certified Adviser permits PwC to guide growth companies in Baltics through the Firth North application process and ensure they meet all the market’s requirements on a continuous basis.
07.03.2023

ESG reporting news - podcast 30 min (in Latvian)

Eiropas Parlaments pagājušā gada novembrī oficiāli apstiprināja Korporatīvās ilgtspējas ziņošanas direktīvu jeb CSRD (Corporate Sustainability Reporting Directive). Šobrīd Eiropas Savienības dalībvalstu, t.sk. Latvijas, rīcībā ir 18 mēneši, lai šo direktīvu pārņemtu savos tiesību aktos. Šādi iecerēts uzlabot pieejamās nefinanšu informācijas kvalitāti, nodrošinot uzņēmumu dažādo ietekmes pušu vajadzības un veicināt kopējo Eiropas pāreju uz ilgtspējīgāku ekonomiku.  

Šajā PwC Nodokļu podkāsta epizodē PwC Latvija ilgtspējas pakalpojumu vadītāja Maija Orbidāne skaidro, kādas ir šīs direktīvas prasības, kā tas ietekmēs uzņēmējus Latvijā un kādi ir laicīgi veicamie mājasdarbi šajā sakarā.
See all PwC publications