Flash News offers the latest information on current tax, accounting, legal and other business issues.
Directive (EU) 2019/2161 adopted in late 2019 (the “Omnibus Directive”) requires member states to transpose it by 28 November 2021, and their amended national rules must come into force by 28 May 2022. This article explores key changes and requirements for traders under the new directive.
When it comes to approving an action plan for a debtor’s legal protection proceedings, it is important to know which of its creditors can vote and to properly interpret the rules that place voting restrictions on certain persons. The insights outlined in this article can help companies in financial distress, creditor representatives and supervisors of legal protection proceedings find out whether only voting creditors have approved an action plan or whether the vote includes any person ineligible to vote.
As we carry on exploring the OECD’s Guidance on the transfer pricing implications of the Covid-19 pandemic (the “Guidance”) this article offers an overview of how government assistance programmes affect transfer pricing analysis.
Favourable rules effective from 2021 have cancelled certain fees that businesses had to pay when making various entries on the commercial register maintained by the Enterprise Registry (“ER”). In other words, when registering traders or any changes to particulars already entered on the commercial register, ER customers are no longer charged for an official announcement in Latvijas Vestnesis, the government gazette.
The United Kingdom (“UK”) left the EU at midnight on 31 January 2020. The Brexit agreement provided that EU nationals staying in the UK until the end of the transition period would keep the social rights that go with EU citizen status, i.e. the opportunity to apply for various benefits, pensions and other social entitlements in the UK, similar to living in other member states. The Trade and Cooperation Agreement signed on 30 December 2020 is applied provisionally from 1 January 2021 pending ratification at EU level. The Agreement includes a separate protocol on social security coordination. This article explores some key changes in social security to be considered by employers after Brexit and in the light of the new agreement.
Latvia has not yet lifted the emergency situation declared because of the Covid-19 pandemic. We have written earlier about a few aid measures available under the Covid-19 Containment Act to businesses affected by the crisis. There are also some other aid measures available, including grants for current assets. This article explores how the aid programme has been adjusted for this purpose.
This article explores hybrid mismatches, ways of identifying them, and a few practical aspects. Hybrid mismatches are basically differences in how a company or an instrument is taxed under the laws of two or more countries. An identified mismatch is eliminated by denying a deduction or by adding the amount to taxable income.
Information published by the Latvian State Revenue Service (“SRS”) on sanctions they have imposed on persons that are subject to the Anti Money Laundering and Counter Terrorism and Proliferation Financing (“AML/CTPF”) Act for breaching this Act and the International and National Sanctions Act, with data for 2020 and 2021, shows a large number of breaches and a lack of awareness of what the two Acts require and whether a company fits the definition of “subject” within the meaning of the AML/CTPF Act.
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.
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 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.
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.
Any company, state-owned or municipal institution or even sole trader that processes the personal data of EU/EEA residents enabling their identification is subject to the General Data Protection Regulation (“GDPR”). Its requirements extend to companies outside the EU/EEA offering goods or services to EU/EEA residents. This article completes what we wrote on this topic last year.
The pandemic has not only brought restrictions but also accelerated the digitisation of the customer identification process. Before the pandemic, the Latvian Anti Money Laundering and Counter Terrorism and Proliferation Financing (“AML/CTPF”) Act had its subjects focusing on customer identification in person, yet the restrictions are forcing them to minimise direct contact and to create new ways of customer identification.
Any company, state-owned or municipal institution or even sole trader that processes the personal data of EU/EEA residents enabling their identification is subject to the General Data Protection Regulation (“GDPR”). Its requirements extend to companies outside the EU/EEA offering goods or services to EU/EEA residents. This article explores ways of ensuring GDPR compliance when it comes to processing data in emails.
This year has passed under the sign of Covid-19, with the pandemic overshadowing one crucial event it’s high time we remembered: Britain leaving the EU. This article explores key changes to how UK citizens can be employed in Latvia after Brexit.
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.
