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02.11.2019

Cash flow statement: meaning and practical use (2/44/19)
Accounting Tax
The cash flow statement (CFS) is a statutory financial statement to be prepared in Latvia by only medium and large companies (sizes defined by the Company and Consolidated Accounts Act). There are not many companies of this size against the total number of companies in Latvia, and even the ones covered by this requirement often approach the CFS as a formal requirement that gives no benefit to their management. Is that true? Not quite, and let’s explore why.
02.11.2019

Cash pool: transfer pricing aspects (3) (1/44/19)
Tax Transfer pricing
To complete our series of articles on the transfer pricing (TP) aspects of a cash pool, this article explores what data and sources are used in practice for setting fees (interest rates) for cash pool members depositing and borrowing cash.
29.10.2019

Cash pool: transfer pricing aspects (3) 1/44/19
Free access Tax VAT

To complete our series of articles on the transfer pricing (TP) aspects of a cash pool, this article explores what data and sources are used in practice for setting fees (interest rates) for cash pool members depositing and borrowing cash.
25.10.2019

Can access to foreign warehouse create permanent establishment? (3/43/19)
Tax CIT
Companies are increasingly expanding their operations around the world by hiring staff to research the local market, negotiate contracts and prices with local customers, and conduct marketing and other activities that promote the company’s business. It is important to find out whether those activities are likely to create a permanent establishment (PE) in the country where they are carried out. This article explores recent changes to the interpretation of law that will affect future PE risk when it comes to assessing the availability of a company’s warehouse abroad.
25.10.2019

Cash pool: transfer pricing aspects (2) (2/43/19)
Tax Transfer pricing
To pick up where we left off about the transfer pricing aspects of a cash pool, this article explores ways of setting fees for cash pool members, including the treasurer, according to the OECD Base Erosion and Profit Shifting (BEPS) discussion draft on financial transactions published in July 2018 (“BEPS report”).
25.10.2019

Proposed penalty for failure to file country by country report (1/43/19)
Stamp Tax Transfer pricing
On 1 October 2019 the Cabinet of Ministers debated and supported proposals for amending the Taxes and Duties Act to impose a new penalty for failure to duly file a country-by-country report.
22.10.2019

Proposed penalty for failure to file country by country report 1/43/19
Free access Tax Transfer pricing

On 1 October 2019 the Cabinet of Ministers debated and supported proposals for amending the Taxes and Duties Act to impose a new penalty for failure to duly file a country-by-country report.
18.10.2019

Employer’s disclosure of contributions to private pension funds: advance tax ruling (3/42/19)
Tax PIT

In July 2019, the State Revenue Service (SRS) published an advance tax ruling that explains how to correctly disclose information in employer statements where an employer’s contributions to private pension funds for a worker come from the employer’s money and where they come from the worker’s money through the employer.
18.10.2019

New service: business income account (2/42/19)
Business Tax
The Ministry of Finance, the State Revenue Service (SRS) and commercial banks are planning to launch a business income account (BIA) as a new service for taxpayers, according to a report posted on the SRS website.
11.10.2019

Bullying in workplace: statute and case law (3/41/19)
Legal Tax Employees
Last week we wrote about emotional or psychological bullying against a worker. This article explores the legislation and recent case law dealing with emotional bullying.
11.10.2019

Changing over to paperless accounting (2/41/19)
Accounting Tax
In the age of digital economy, the business community needs to keep abreast of industry trends. In accounting, the trend is towards a paperless future, but this raises some questions. How do we go about this? What tools do we need? What legislation must we comply with?
08.10.2019

Monitoring compliance with AML/CTPF Act 1/41/19
Free access Legal Tax AML

The State Revenue Service (SRS) is in the process of reviewing external accounting service providers and tax consultancies for compliance with the Anti Money Laundering and Counter Terrorism and Proliferation Financing (AML/CTPF) Act.
04.10.2019

Emotional bullying in workplace (3/40/19)
Legal Tax Employees
A favourable working environment is among the factors that drive staff productivity, but a worker may also face a consistently negative attitude to them in the workplace. As a result, the person may find it intolerable to be there. This article explores the forms and characteristics of emotional bullying and ways of fighting it.
04.10.2019

Intragroup loan: tax authority’s ruling confirms cases where retained earnings do not need reducing (2/40/19)
Tax CIT
After the corporate income tax (CIT) reform, loans to related parties may be taxable, raising the question of whether a loan can be made with no CIT implications. This article looks at a new ruling published by the State Revenue Service (SRS) explaining how to apply statutory exclusions.
01.10.2019

26.09.2019

Workplace video surveillance (2) (3/39/19)
Legal Tax Employees
This article completes what we wrote last week.
26.09.2019

CIT Act to be amended: permanent establishment (2/39/19)
Tax CIT
We have informed our MindLink.lv subscribers about proposals for amending the Corporate Income Tax (CIT) Act. This article explores only proposals relating to a permanent establishment (PE).
20.09.2019

Intragroup mobility of third country nationals: easier, faster, and lawful (3/38/19)
Legal Tax Employees
Nationals of a third-country such as Belarus holding a Latvian work permit are not allowed to work in other EU member states. This article explores how third-country nationals can lawfully move within multinational enterprises across the EU.
20.09.2019

Workplace video surveillance (2/38/19)
Legal Tax Employees
The National Data Office has stated that installing video surveillance devices in the workplace with audio recording is unlawful unless the law expressly permits their use. This article explores video surveillance in the light of the General Data Protection Regulation.
20.09.2019

Rule No. 969 on business trip expenses to be amended (1/38/19)
Accounting Tax Employees
The Finance Ministry’s proposals for amending the Cabinet of Ministers’ Rule No. 969 were announced at a meeting of state secretaries on 18 July 2019. This article explores some of the proposals to be debated soon.
13.09.2019

Adverse consequences of widening State Revenue Service’s powers (3/37/19)
Legal Tax
At various stages of their control measures, the State Revenue Service (SRS) has the power to apply means of securing enforcement of their potential decisions. The SRS’s powers were expanded on this matter a year ago, and this expansion is affecting any entities and individuals that are being scrutinised by the SRS. However, those newly acquired powers appear to be exercised in a formal manner improperly restricting taxpayers’ rights.
13.09.2019

Recording remote working hours (2) (2/37/19)
Legal Tax Employees
This article completes what we wrote last week.
06.09.2019

Recording remote working hours (3/36/19)
Legal Tax Employees
Remote work is becoming increasingly popular as it allows workers to better plan their time and combine a career with a family life. Although working from home might seem to mean that employees are free to arrange and plan their work as long as they do what is required and work the hours prescribed by their employment contract, it is important to remember that the working time rules of the Latvian Labour Code still apply.
06.09.2019

Special discounts to employees: tax issues (2/36/19)
Tax PIT
Businesses are developing a variety of methods for attracting, motivating and retaining customers and employees. Those methods usually mean expenses that need correct tax treatment. We have written about customer loyalty event expenses here. This article explores some of the tax issues arising from special discounts a company might provide to its employees.
29.08.2019

Amendments to Corporate Income Tax Act: donations (3/35/19)
Tax CIT
From 1 January 2018, the CIT Act gives a number of reliefs to businesses that have donated to public benefit organisations, state-funded institutions, or state-owned companies performing national culture functions delegated by the Ministry of Culture. We have written earlier about the new rules for donations and their application. Amendments to the CIT Act effective from 1 July 2019 lay down favourable rules for donors, which we hope will favourably affect donees.
29.08.2019

Corporate tax amendments to neutralise hybrid mismatches (2/35/19)
Tax CIT
We have written earlier about proposals for amending the Corporate Income Tax (CIT) Act. This article explores amendments dealing with hybrid mismatches and ways of neutralising them in CIT treatment.
23.08.2019

Income tax overpayment not available (3/34/19)
Tax PIT
We have written about what we discovered earlier this year when preparing annual tax returns for 2018. A certain group of persons saw an unexpectedly high overpayment of personal income tax (PIT) automatically calculated on the Electronic Declaration System (EDS) as a result of amounts of solidarity tax (ST) transferred to the PIT account. This article explores the comment offered by the Ministry of Finance (MOF) and the State Revenue Service (SRS).
23.08.2019

Latest VAT developments (3) (2/34/19)
Tax VAT
This article completes what we wrote last week.
23.08.2019

Cash pool: transfer pricing aspects (1) (1/34/19)
Tax Transfer pricing
Multinational enterprises tend to set up cash pools to optimise disposable intragroup funds and minimise their reliance on external financing. But setting up a cash pool creates the need to prove the arm’s length nature of cash pool transactions and, possibly, to prepare transfer pricing (TP) documentation. This series of articles will be exploring key TP considerations regarding cash pool transactions between related parties in the light of Latvian TP rules and best practices recommended by the OECD BEPS project.
16.08.2019

Deducting input VAT in chain of consecutive supplies (3/33/19)
Tax VAT
On 10 July 2019, the Court of Justice of the European Union (CJEU) ruled on Case C-273/18 Kursu Zeme SIA vs the Latvian State Revenue Service (SRS), which examined the question of whether in a chain of consecutive cross-border supplies of goods with one transportation, the end customer – a Latvian entity – had the right to deduct the input VAT appearing on another Latvian entity’s tax invoices if Kursu Zeme SIA received the goods in Lithuania (at the original supplier’s warehouse) and itself ensured transportation to Latvia. This article explores the CJEU findings.
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