Given the impact of Covid-19 on many companies, on 14 July the Cabinet of Ministers adopted regulations to allocate EUR 19.2 million in aid to companies in the tourism industry and EUR 51 million in aid to exporters whose financial position has significantly deteriorated as a result of Covid-19. The new rules will come into force on the effective date of the European Commission’s decision on the compatibility of business aid with the EU internal market. This aid will be administered by the Latvian Investment and Development Agency, awarding it within the available finance allocation and by reference to the sequence in which aid requests are submitted. The aid will take the form of a grant aimed at helping companies pay wages and salaries.
Although the global economy is undergoing significant transformation as a result of Covid-19, capital keeps moving across borders and investors are still interested in investing. In these uncertain times, investors are particularly keen to maximise the diversification of their investments in order to mitigate the consequences of the financial crisis.
What is it that differentiates a temporary residence permit from an EU Blue Card? While both documents allow a foreign national to spend a certain period in Latvia, there are essential differences that need to be considered when choosing either of them. This article explores five key differences between the temporary residence permit and the EU Blue Card.
The VAT treatment in the financial and insurance (“F&I”) sector prescribed by Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, which exempts F&I services without recovery of input tax on goods and services acquired for supplying those services, remains unchanged since 1977. Irrecoverable input tax causes extra cost to F&I players and their customers as well. Our experience suggests that the VAT treatment in the financial sector has been suffering from legal uncertainty and high administrative costs incurred in applying the VAT rules. The outdated definitions of services make it difficult for fintech companies to figure out how to claim an exemption. And there are no instruments to reduce the burden of irrecoverable input tax. This article explores whether the F&I sector is in for change.
Amid the international outbreak of COVID-19 and the resulting public uncertainty, we see that crime in general, including fraud, blackmail, money laundering and other economic crime, tends to grow. It basically makes sense to expect such activities from persons that have been involved in illegal activities and tried to exploit the weakest links of the existing legal framework and public order in their own interests. A similar illegal strategy is implemented in the present situation, in which people are focusing on other crucial and urgent issues and becoming less cautious or making rash decisions because of the emergency situation. Practice also suggests that the rising crime rates are directly linked to the circumstances caused by COVID-19.
A survey PwC conducted in late 2019 finds that 77% of Latvian company representatives have asked the State Revenue Service (“SRS”) for assistance or comment, and about a half of their enquiries were concerned with interpreting tax laws.
Due to the emergency situation declared in Latvia for COVID-19 containment, companies as well as central and local government agencies have taken measures to protect their workers, customers and other persons against potential threats to their health in order to continue working to the extent possible in the emergency situation. Under the circumstances, a new type of information about individuals is additionally being gathered and processed, for example, whether they have any symptoms, whether the person has been in contact with anyone who might be infected, including any COVID-19 tests and their results, as well as other information relating to places someone has visited.
The government is working hard to put support measures in place for entities affected by the COVID-19 crisis. Last week the Cabinet of Ministers put into effect a number of rules concerning industries affected by the COVID-19 crisis and how employers in those industries qualify for idle-time benefit. Despite the original intention to restrict tax deadline extensions and idle-time benefit to entities operating in the listed industries, at the meeting of 26 March, the Cabinet of Ministers approved a set of criteria to make an affected entity in any industry eligible for idle-time benefit and tax holidays for up to three years. This article explores what we see as key points.
Governments and health supervisory agencies around the world have launched an all-out fight against COVID-19, but more needs to be done. Several countries have quarantined millions of people, and if the situation deteriorates, more countries might follow suit. COVID-19 has become a serious risk for the Latvian economy as well as globally.
Technology plays a huge role in many industries and particularly affects bookkeeping and financial accounting. Specialist digital skills and experience of working with state-of-the-art technological solutions as well as the skill of creating and developing digital tools are key to successful financial accounting and management in your company.
The Cabinet of Ministers’ Rule No. 55 of 28 January 2014 on employing foreign nationals has been amended with effect from 28 December 2019. The amendments make it easier for an employer to employ third-country nationals in Latvia. This article explores the amendments and the easy terms.
Paying Taxes 2020, an annual study of global tax administration produced by PwC and the World Bank Group, finds that economies around the world have made it substantially easier for their businesses to pay taxes thanks to technology. The report highlights the significant advantages that tax authorities give their taxpayers if they embrace technological advances. In Brazil and Vietnam, for example, the time it takes to comply with tax obligations fell by 23%, while some other countries reported a big drop in the number of tax payments.
We have written about the burning question of how to calculate the value of a related-party loan for the current year. This is crucial in determining whether the taxpayer is required to prepare and submit transfer pricing (TP) documentation to the State Revenue Service (SRS) within 12 months after the end of the financial year. As the deadline for 2018 is almost upon us (31 December 2019), PwC approached the Ministry of Finance and the SRS for comment. This article explores the opinion shared by the two bodies and PwC’s understanding of their comment.