A new year, a new beginning! As usual, this article summarises the provisions of tax laws and other legislation affecting the calculation of national social insurance (NSI) contributions, solidarity tax (ST) and personal income tax (PIT) on wages and salaries in 2023.
Proposals for amending the National Social Insurance (NSI) Act were sent to the Ministry of Finance and the Ministry of Justice for approval on 10 November 2022. This article explores some of the proposed changes.
The Personal Income Tax (PIT) Act has been amended with effect from 14 November 2022. This is a follow-up to our article “Personal Income Tax Act to be amended in 2022”. Changing the PIT Act affects some other pieces of legislation, so amendments to the National Social Insurance (NSI) Act were sent to the Ministry of Finance and the Ministry of Justice for approval on 10 November 2022.
To measure the taxable income of businesses and individuals correctly, we need to assess whether self-employed expenses are associated with the conduct of business. In applying personal income tax (PIT), self-employed persons should follow the rules of the PIT Act and the Corporate Income Tax (CIT) Act, which in certain cases may cause disagreement with the State Revenue Service (SRS). This article explores some of the self-employed expenses the SRS may challenge if they are deducted as business expenses.
Amendments to the Personal Income Tax (PIT) Act were announced on 31 October 2022. The outgoing government has managed to introduce a number of important legislative changes. This article explores changes to the special rules of section 11.13, governing how income from an investment account is determined.
Now that the concept of remote work has become an everyday occurrence, many companies are considering ways to adapt their online staff motivation and team-building events to the new conditions. This article explores the State Revenue Service’s opinion on staff sustainability events held within one department of an organisation and on catering expenses being included in staff sustainability event expenses (“SSEE”) if an event is held remotely.
Several EU member states are taking the taxation of employee share ownership plans in startup companies a step further. Their national rules make share plans far more attractive to startup employees and provide a more founder-friendly environment. While the rules aim to ensure startups give their employees a stake in the company, there are many solutions countries can use to achieve this goal.
With advanced technology and improved international cooperation, people are becoming less and less tied down to a particular residence. Many relocate from Latvia to live abroad indefinitely. Since this is a new experience for most people, this article summarises key tax aspects a Latvian tax resident should consider in the case of relocation.
On 22 December 2021 the Supreme Court’s Administrative Division ruled on case A420209519, SKA-744/2021 dealing with the personal income tax (PIT) treatment of a non-resident individual’s sale of real estate (RE) in Latvia. The ruling reinforces the understanding of the PIT treatment for a non-resident selling RE to Latvian tax-resident individuals who are not traders.
On 2 August the Ministry of Finance published a proposal for amending the Personal Income Tax (PIT) Act to change the rate applicable to foreign nationals working remotely in Latvia. If approved, the proposal will come into force on 1 January 2023. There is no knowing how the proposal will move on, as it still needs approval from the Ministry of Justice, but we can examine its potential impact.
Nowadays renting out real estate (RE) is a common line of business carried on by individuals. The growing popularity of www.booking.com and www.airbnb.com makes choosing the right tax scheme an important decision. Latvian law offers a number of ways to register a business and pay taxes. This article explores what options are available when it comes to registering a person’s RE letting and whether it is possible to change the form of registration.
With employee stock options becoming increasingly popular, Latvian companies too are offering this incentive not only to their own employees but to those of their subsidiaries. This article explores the corporate income tax (CIT), personal income tax (PIT) and national social insurance (NSI) implications of a Latvian company awarding stock options to its own and subsidiary employees.
The Covid-19 pandemic had a significant impact on people’s habits, with restrictions affecting many events, including contests. More and more public events are taking place as we return to normal life. Various contests are being held, and individuals taking part win prizes. What taxes apply on such cash and non-cash prizes? Who is responsible for reporting this income and paying taxes? Is it the individual or the company that holds the contest and pays the benefit?
With the summer holidays approaching, student employment is an option. This article explores tax aspects to be considered if a student wants to do paid work during the summer holiday, how such income is treated, and what tax relief is available to parents.
When starting a new business, it can be a challenging task to establish a sustainable financial infrastructure from the very beginning. For the investors focusing on start-ups, one of the most difficult tasks is determining how to price the investment.