The preparation of annual accounts is relevant to each company, and this process often involves making multiple changes that have a direct effect on the numerical information presented in the company’s financial statements. Accounting software mostly ensures automatic preparation of the balance sheet and the profit and loss account, yet companies, depending on their size, may have to produce a number of notes that tend to take a long time to prepare. In this article we share recommendations for accelerating the technical preparation of financial statements.
On 15 March 2022 proposals for amending the Employment Act were endorsed by the Cabinet of Ministers and submitted to Parliament for approval. The amendments are being made in order to transpose two EU directives that Latvia must pass by August 2022 and to implement the Constitutional Court’s ruling No. 2019-33-01 of 12 November 2020, which recognises that section 155(1) of the Employment Act, giving a childbirth leave entitlement to the father, is not consistent with the first sentence of the Constitution’s section 110 insofar as it offers no protection or support for a female partner of the child’s mother due to the birth of the child. This article explores key changes and how they affect workers and employers.
The State Revenue Service (SRS) is increasingly exercising its statutory power to have a company’s board member pay an overdue tax liability if that debt cannot be collected from the company. For the board member this often means thousands of euros to pay, private accounts blocked, and properties seized. This article explores the legal grounds for such actions and outlines substantial errors in decisions made by the SRS.
Our customers often ask us if transfer pricing adjustments affect VAT. This is an issue that remains unresolved by the VAT directive, the Latvian VAT Act, the Cabinet of Ministers’ rules, or guidelines issued by the State Revenue Service (SRS). Even the Court of Justice of the European Union (CJEU) has never dealt with this issue in its rulings. This article explores an opinion expressed by the European Commission’s VAT committee.
A foreign company planning to do business in Latvia can choose between registering a subsidiary or operating through a branch. This choice is commonly dictated by the group’s governance strategy and long-term plans in Latvia. A foreign company going for a simplified arrangement can register either a branch with the Enterprise Registry or a permanent establishment (PE) with the State Revenue Service (SRS) only for paying Latvian corporate income tax (CIT). This article outlines some CIT and accounting issues relevant to PE activities in Latvia.
Since war broke out in Ukraine, many people have been eager to help Ukrainian people with various donations. Last week we wrote about the Latvian VAT treatment of donations and how the tax rules should be changed to cover various cases. This article explores the corporate income tax (CIT) treatment of donations.
Looking for shelter from the war, Ukrainian civilians are emigrating en masse. Several thousands of refugees have entered Latvia, and some Latvian companies have already come forward to employ them. This article explores the tax treatment of these persons being employed in Latvia.
In last week’s article on the guidance issued by the State Revenue Service (SRS), we looked at the first two of five key factors the SRS highlights as noteworthy in transfer pricing (TP) determinations for periods affected by the pandemic. This article explores the remaining three factors that are no less important.
As the war in Ukraine goes on, many companies have unselfishly donated to Ukrainian residents and to Ukrainian refugees having crossed the EU border. Does the current tax regime encourage donations? And how has the Latvian government responded to the present situation?
Latvian tax residents are also taking the opportunity to work abroad. A Latvian tax resident meeting certain criteria may become a tax resident in the foreign country where he is employed. Selling real estate (RE) located in Latvia or other assets may raise the question of which country’s personal income tax (PIT) is payable on the profit you make on the transaction.
The world and things keep changing, and this change is affecting the environment significantly – both positively and negatively, allowing and even forcing us to revise various processes and activities to make them consistent with the reality. These factors are also affecting transfer pricing (TP).
After the Russian Federation decided on 23 February 2022 to recognise the Donetsk People’s Republic and the Luhansk People’s Republic as independent states, followed by the invasion of Ukraine on 24 February, the EU, the UK, the US and Canada as well as other countries have launched wide-ranging sanctions aimed at changing Russia’s behaviour and eliminating the current threats in Ukraine and CEE.
From 1 March it is possible to prepare the annual income tax return for 2021 through the Electronic Declaration System (EDS) of the State Revenue Service (SRS). This article explores what situations mandate this filing and what time limits apply, as well as other related issues.