The Labour Act has been amended with effect from 5 January 2021 to adopt requirements of relevant EU directives. The new rules affect foreign employers posting employees to work in Latvia and Latvian employers posting staff to work abroad, as well as temporary employment agencies. The amendments strengthen the definition of a “posting” and the rules companies must follow when posting their workers. This article also explores key changes to daily allowances on business trips.
Last year the State Revenue Service (“SRS”) for the first time analysed data supplied by the Latvian banks to find income unreported by Latvian residents. Many taxpayers had a letter from the SRS asking them to explain why their bank income details do not match their tax filings. This article explores how the SRS runs taxpayer checks and what response is advisable.
The State Revenue Service (“SRS”) has come up with a new procedure for taking out a Latvian tax residency certificate to ease the administrative burden on organisations and individuals. The new procedure means a considerable time saving and is covered by amendments to the Cabinet of Ministers’ Rule No. 178, Procedures for Claiming Tax Relief under Double Tax Treaties, effective from 4 November 2020.
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.
Globalisation is seeing a constant increase in cross-border business, something that encourages entrepreneurs to look for a suitable corporate structure within and outside their base country. Choosing a particular structure is often based not only on business interests in a certain market but also on favourable administrative and tax rules.
Travel restrictions due to Covid-19 are affecting not only our plans to relax abroad but also trips we take for business purposes. For some workers this means having their regular business trips cancelled and spending more time videoconferencing, while others have their normal place of work changed. We can work from home for foreign as well as local companies. This article explores some aspects of employment income taxation for employees physically working abroad because of pandemic-related restrictions.