The Accounting Act and the Cabinet of Ministers’ Rule No. 877 came into force on 1 January 2022. Because no transition period is allowed for the new requirements, this article again highlights key changes affecting the CEO’s duties and responsibility for adopting control system rules that must be described in the company’s accounting policy.

A company’s shareholders in a general meeting may decide to pay a dividend once the annual accounts showing a profit have been approved. If the company’s articles of association provide for this, the Commerce Act permits an interim dividend to be declared and paid halfway through the financial year. This article explores the legislation and corporate income tax (CIT) treatment of dividends a Latvian branch pays to its foreign head office.

If a company finds it is governed by the Anti Money Laundering and Counter Terrorism and Proliferation Financing (AML/CTPF) Act, it has two priority steps to take: register as an entity subject to the Act after stating a type of activities governed by the Act, and appoint an officer responsible for ensuring compliance with the Act’s requirements under section 10. This appointment must be reported to the relevant supervisory authority such as the State Revenue Service or the Financial and Capital Markets Commission.
 

On 7 January 2022 the Constitutional Court ruled on case No. 2021‑06‑01, in which the Ombudsman claimed provisions of the Personal Income Tax (PIT) Act for determining traders’ taxable income are inconsistent with section 105 of the Constitution. This article explores why those provisions were challenged and what the ruling found.
 

Our experience suggests that individuals tend to disagree with tax authorities about how provisions of international law should be applied. There is often disagreement over which country’s tax law is applicable and to what extent. A dispute usually arises in the case of a cross-border transaction, i.e. if income is earned abroad. This article explores a few steps that will help you analyse the applicable law and find out whether your foreign-source income is subject to Latvian personal income tax (PIT).
 

In our previous article on financing available to businesses we informed our MindLink subscribers about additionally available grants, loans and guarantees financed out of public and EU funds. A new EU funding period has just started, with sub-programmes being developed in detail for setting EU financing priorities. The aggregate EU investment for 2021–2027 involves EUR 10.44 billion to be absorbed by Latvia’s economy. A preliminary list of priorities and qualifying measures has been drawn up, and projects could be launched from mid-2022. Financing from the EU funds for project implementation is available to every Latvian citizen who has a clear idea of how to contribute to society’s well-being, economic growth and sustainable development. Projects may be submitted by entrepreneurs, municipalities and governmental organisations. This article explores the priorities, available funding and programmes of the Latvian Recovery Fund, as well as financing available from the EU Structural Funds for 2021–2027.

Just before Christmas, the OECD published the long-awaited Global Anti-Base Erosion (GloBE) rules. This article highlights the main principles underlying the system and how the tax liability is computed.
 

In late 2021 the government debated and approved the Justice Ministry’s proposals for amending the Commerce Act. Although the amendments have yet to be endorsed by Parliament, they might come into force on 1 July 2023. The most important proposals relate to disclosure requirements for a public limited company’s shareholders.
 

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 2022.
 
 

On 8 October 2021 the Supreme Court announced a ruling on case SKA-301/2021 regarding expenses a person incurs in repaying a mortgage on an inherited real estate (RE), which may be treated as an investment in a functionally similar RE.
 

Latvia is committed to reducing its CO₂ emissions. One of the objectives is to cut emissions from road vehicles. This can be done by minimising the overall use of transport and by encouraging the use of vehicles with low or zero CO₂ emissions. This article explores what incentives are available for buying and using electric vehicles (EVs) in Latvia and other member states.
 

The world is facing significant and increasingly urgent challenges that are affecting individuals, organisations, governments and society alike. These trends are coming fast and impacting decision-making today. The challenges facing business leaders are significant and complex, with a substantial rise in the expectations people place on decision-makers as leaders.

Entering into contracts for services is an inevitable part of business, but this cannot be undertaken without fully assessing inherent risks. Over the years the courts have developed sufficient case law allowing us to make conclusions about how they approach situations that involve assessing the nature of a legal relationship to determine whether the contract is one for services or one of employment. This article explores some of the case law that prescribes the conduct of parties entering into either type of contract.

The Court of Justice of the European Union (CJEU) has examined a question that often faces Latvian taxable persons. May an excessive price of advertising services and the fact that they are not clearly necessary for the company’s business give the tax authority grounds for denying a deduction of input tax on the advertising expenses? This article explores the court findings and their practical implications.

We have already informed our MindLink subscribers that every company needs to update its accounting policy because the new Accounting Act effective from 1 January 2022 is replacing the old Accounting Act of 1993. This article explores what material changes the accounting policy needs to describe and what purposes it serves.