When employees are sent on business trips abroad, various online platforms are increasingly used for booking the necessary accommodation and transport services. A variety of other goods and services are also being ordered online from foreign vendors. Any documents received often fail to make it clear whether VAT has been charged on the supply and who is the other party (the platform or its customer). This article explores a few models commonly found across the EU from the buyer’s point of view.
This article summarises the provisions of tax laws and other legislation affecting the calculation of personal income tax (“PIT”), national social insurance (“NSI”) contributions and solidarity tax (“ST”) on wages and salaries in 2021.
Publicly available information on Latvian companies growing their exports or launching business abroad is always welcome, yet they have to meet foreign administrative requirements, including legal issues (work safety, employment, permits and registrations) as well as accounting and taxation. This article explores the obligation to pay foreign corporate income tax (“CIT”) and employee taxes potentially facing a Latvian company. VAT rules are usually assessed separately and a VAT registration requirement can arise where there is no obligation to register for other taxes, hence no VAT comments here.
Draft rules that significantly change the system for reporting suspicious transactions were announced at the meeting of state secretaries on 14 January 2021. This article explores the current reporting requirements and the proposed changes relating to the new goAML app.
On 20 January 2021 the Court of Justice of the European Union (“CJEU”) ruled on case C‑655/19 to determine whether a transaction, in which an individual sold properties he acquired as creditor through enforcement procedures after he had provided mortgages, is considered economic activity within the meaning of the VAT directive and attracts VAT. This article explores the CJEU’s findings.
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.
The UK left the EU on 1 January 2021 and now fits the definition of a “third country.” Having joined the European Community on 1 January 1973, the UK is the first country to have formally left the EU after spending 47 years as a member state. Changes brought about by Brexit are affecting not only taxation, immigration and trading but also the operation of the Anti Money Laundering and Counter Terrorism and Proliferation Financing (“AML/CTPF”) Act.
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.
To ensure systematic accounting for VAT and prevent evasion where a supply continues for a long time and the tax point is difficult to identify, the VAT Act lays down time limits for issuing a tax invoice and reporting VAT. But are those deadlines applicable to a supply between two Latvian-registered taxable persons where the customer is responsible for accounting for VAT (“local reverse charge”)?
The unique economic conditions arising from Covid-19 and national restrictions have caused certain difficulties in applying the arm’s length principle for transfer pricing analysis. To pick up where we left off in our article Covid-19: transfer pricing impact, this one explores Guidance on the transfer pricing implications of Covid-19 the OECD published in late 2020.
Alternative legal solutions are an efficient tool that helps companies balance unpredictable workflows and staff turnover and enables their legal department to work well, while cutting total costs and keeping their staff happy with their workload, pay, and growth opportunities. These solutions are no longer a proof of concept or a brand new business model. They have been tried and tested, work successfully worldwide, including Latvia, and are used by companies of different sizes.