PIT

19.12.2019

Personal and dependant allowances in 2020 (3/51/19)

Tax PIT

The Cabinet of Ministers’ Regulation No. 676 of 14 November 2017 on allowance levels was amended on 19 November with effect from 22 November 2019. This article explores changes to the allowance levels and a new coefficient.

29.11.2019

CIT and PIT treatment of dividends: advance tax ruling (1/48/19)

Tax CIT PIT

In October 2019, the State Revenue Service (SRS) published an advance tax ruling on the corporate income tax (CIT) and personal income tax (PIT) treatment of dividends paid out of profits formed by proceeds from selling a subsidiary. The ruling answers some long-awaited questions about the tax implications.

15.11.2019

Paying dividends in 2019: aspects to consider (1/46/19)

Tax CIT PIT

Under the transition rules of the Personal Income Tax (PIT) Act, 2019 is the last year in which dividends an individual receives out of profits arising before 2018 qualify for a reduced rate of PIT. This article explores some aspects to consider where a Latvian company pays dividends to individuals in 2019.

12.11.2019

Paying dividends in 2019: aspects to consider 1/46/19

Free access Tax CIT PIT

Under the transition rules of the Personal Income Tax (PIT) Act, 2019 is the last year in which dividends an individual receives out of profits arising before 2018 qualify for a reduced rate of PIT. This article explores some aspects to consider where a Latvian company pays dividends to individuals in 2019.

18.10.2019

Employer’s disclosure of contributions to private pension funds: advance tax ruling (3/42/19)

Tax PIT

In July 2019, the State Revenue Service (SRS) published an advance tax ruling that explains how to correctly disclose information in employer statements where an employer’s contributions to private pension funds for a worker come from the employer’s money and where they come from the worker’s money through the employer.

06.09.2019

Special discounts to employees: tax issues (2/36/19)

Tax PIT

Businesses are developing a variety of methods for attracting, motivating and retaining customers and employees. Those methods usually mean expenses that need correct tax treatment. We have written about customer loyalty event expenses here. This article explores some of the tax issues arising from special discounts a company might provide to its employees.

23.08.2019

Income tax overpayment not available (3/34/19)

Tax PIT

We have written about what we discovered earlier this year when preparing annual tax returns for 2018. A certain group of persons saw an unexpectedly high overpayment of personal income tax (PIT) automatically calculated on the Electronic Declaration System (EDS) as a result of amounts of solidarity tax (ST) transferred to the PIT account. This article explores the comment offered by the Ministry of Finance (MOF) and the State Revenue Service (SRS).

19.07.2019

Receipt lottery in Latvia and abroad (3/29/19)

Tax PIT

To fight the shadow economy, a number of European countries offer their residents a variety of benefits in exchange for honest payment of taxes. Those benefits include a national lottery in which cash-register receipts for goods and services take part in various prize draws. Latvia launched its first receipt lottery on 1 July 2019.

14.06.2019

Unexpected overpayment of income tax in Electronic Declaration System (2/24/19)

Tax PIT

Individuals preparing their annual income tax return this spring had to consider the changes made by the tax reform of 2018. Quite a few people preparing the tax return electronically were in for a surprise.

07.06.2019

Easy tax treatment of rental income (3/23/19)

Tax PIT

We have had questions about reporting rental income from property and applying easy terms of personal income tax (PIT) where the statutory notification of a tenancy agreement is overdue. This article explores the statutory obligation and case law allowing an individual to charge a 10% PIT on rental income without registering as a trader.

07.06.2019

EU countries competing for wealthy individuals (2/23/19)

Tax PIT

Over 160,000 people in almost 20 EEA countries are avoiding their fair share of local income tax by enjoying special tax schemes for individuals willing to change their tax residence. In the fight for tax revenues, more and more member states are introducing special exemptions to attract the rich and mobile. This article summarises the main takeaways from a recent study.

10.05.2019

SRS interprets PIT treatment of non-resident’s disposal of RE company (1/19/19)

Tax PIT

In response to an advance tax ruling (ATR) request from a non-Latvian tax resident individual, the State Revenue Service (SRS) has explained the personal income tax (PIT) treatment of a non-resident’s disposal of shares in a Latvian company with real estate in Latvia representing more than 50% of its assets (the “Latvian RE Company”). The ATR has been issued to a particular taxpayer and is not public, so it cannot be applied directly. This article explores the SRS conclusions about the PIT treatment in similar situations.

26.04.2019

Tax authority’s comment on filing annual income tax returns (1/17/19)

Tax PIT

When helping our clients prepare their annual income tax returns, we face various questions about applying the Personal Income Tax (PIT) Act that we regularly check with the State Revenue Service (SRS). We have now received SRS comment on the requirement for filing the annual income tax return in various situations, including PIT underpayment and filing exemptions.

29.03.2019

Student summer work: do I file annual income tax return? (3/13/19)

Accounting Tax Employees PIT

With the 2018 annual income tax filing season in, some people begin wondering about the personal income tax (PIT) treatment of a dependent student employed in the summer. There are quite a few questions about this, but the aggregated answers are nowhere to be found. In this article, we will answer a few topical questions, for example: • How does a student’s work affect the parent’s PIT liability? • Can a student recover any overpaid PIT and to what extent? • Has such work created an underpayment or overpayment of tax?

21.03.2019

Construction loan: enough to support investment for tax purposes? (2/12/19)

Tax PIT

The Administrative Division of the Supreme Court analysed whether the amount an individual borrowed to build a house (in conjunction with other evidence) is a sufficient basis for amounts invested in real estate (RE) and allows a personal income tax (PIT) deduction on the capital gain. This article explores the findings made by the court.

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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.

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.

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