Flash News offers the latest information on current tax, accounting, legal and other business issues.
A proper analysis of workforce data can transform how organisations make decisions and optimise their resources. This has become crucial for today’s talent management, staff engagement, performance management and productivity purposes. In our earlier articles we looked at the significance of adopting human resource (HR) technologies to conduct a proper analysis of HR data and use it for business purposes. In this article we will explore various categories of workforce data that companies can gather in-house. Analysing the accumulated data will help you obtain an idea of what is working and what needs improving, allowing you to identify issues and come up with solutions faster, while revising and improving your processes.
We have written before about situations that could have taxpayers confused about the right period for including non-business expenses in the taxable base on the corporate income tax (CIT) return. To pick up where we left off, let’s now explore how and when the company should respond if its non-business expenses have been included in the taxable base but a credit note has arrived for those expenses.
A while ago Riga Regional Court passed Ruling CA-1102-22/7, which deals with a former employee’s right to recover outstanding wages from the employer for a period of posting and how to apply the concept of daily allowance and exercise the resulting right to include it in the worker’s hourly rate. Given the common practice of paying daily allowances to workers, in this article we will look at how this ruling defines the court’s vision for paying a legally reasonable daily allowance and making it part of the total remuneration.
The Cabinet of Ministers is expected to approve a bill amending the Anti Money Laundering and Counter Terrorism and Proliferation Financing (AML/CTPF) Act. Although the bill has yet to undergo parliamentary review and may therefore be modified, we suggest you familiarise yourselves with the proposed changes, as they will significantly affect persons governed by the AML/CTPF Act that make foreign exchange cash purchases or sales, and legal arrangements, including trusts.
A worker is subject to the employer’s procedures and orders. In addition to a contract of employment that lays down the parties’ mutual rights and duties, the worker also has to comply with his job description and the employer’s internal rules, terms of business, and code of ethics in certain cases. If the rules of conduct described in these documents are seriously breached during working hours, this may lead to dismissal. In this article we will find out if it’s possible to terminate employment because the worker’s breach involves activities outside working hours.
As the Year of Knowledge begins, we are opening registration for the 16th season of our “Tax Foundation Course”. This is a training programme created by PwC Latvia experts that invites people with various backgrounds to become familiar with the Latvian tax system and learn how to apply taxes properly under the direction of highly qualified and experienced lecturers. This programme has been completed by more than 1,100 company representatives and individuals wishing to enhance their understanding and consolidate their knowledge of tax matters.
Latvia’s current transfer pricing (TP) rules came into force back in 2018, bringing changes to the structure of TP documentation (TPD) and to materiality thresholds that require taxpayers to prepare a specified form of TPD. Many taxpayers are still confused about the right way to measure the amount of a controlled financial transaction, which results in an obligation to prepare, or to prepare and file, a specified form of TPD if the taxpayer has no other types of controlled transactions. This article explores the procedure for determining the controlled transaction amount (CTA) for various types of financial transactions according to Latvian TP rules and international law, as well as looking at the practice in Lithuania and Estonia, the most similar economies to Latvia.
Remote work has become a standard form of employment, as evidenced by increasing numbers of people choosing jobs with the option of working from home. This drives workforce globalisation, with technology allowing people to work anywhere in the world without changing their home. Remote work also allows people to change employers rather quickly. A digital nomad is one who takes maximum advantage of remote work. Despite their popularity, however, these new arrangements pose tax risks for workers and their employers alike. Many tax experts and researchers are therefore convinced that extensive and comprehensive reforms need to be devised in this area as soon as possible to prevent the current tax rules from lagging behind the trends in the international labour market.
The Corporate Income Tax (CIT) Act requires companies to include their non-business expenses in the taxable base for a particular tax period. Since the tax period is one month, various situations can have you confused about the right period to report such expenses. This article examines four different situations.
Identifying the ultimate beneficial owner (UBO) of a legal entity is key to securing compliance with the anti-money laundering (AML) rules and making sure that no business is done with sanctioned persons. Yet there are some other aspects to be considered because the rules vary as to how a UBO is defined in each particular case. This article explores how these differences can be detected and applied for daily purposes to ensure compliance with the AML rules and the sanctions rules.
In a market with growing business pressures and increasingly intense competition, companies are looking for ways to optimise their resources and stay competitive. Outsourcing the accounting function is a good solution that offers many advantages, while at the same time posing challenges and risks. This article explores the advantages and disadvantages of an external accountant to help companies better understand this option and make an informed decision about taking it.
By a unilateral decision, Russia has indefinitely suspended certain clauses of its double tax treaties (DTTs) with 38 countries from 8 August 2023. This article examines the list of affected countries and the status of Latvia’s DTT.
The European Sustainability Reporting Standards, which we had been awaiting since the adoption of the Corporate Sustainability Reporting Directive, were approved in late July. The directive aims to provide transparent publicly available information on social and environmental risks facing companies, on new opportunities, on what activities companies are already doing, and on their future goals and ESG results achieved so far. Details of which companies are subject to the directive’s requirements can be found here.
Last week we wrote about the Cabinet of Ministers’ new Rule No. 333, List of Tax Havens, and about the changes made to this list – four jurisdictions have been added from 1 July 2023, including Russia. This article explores some aspects of corporate income tax (CIT) treatment you need to consider if you continue doing business with a company from Russia or any other jurisdiction that refuses to cooperate for tax purposes.
The Taxes and Duties Act is among the pieces of legislation that have been amended the most in recent months. A number of important changes have been made to reviews facing taxpayers and ways of settling disagreements with the State Revenue Service (SRS).
We have written before that on 14 February 2023 the EU Council decided to add another four to the EU list of non-cooperative jurisdictions for tax purposes: British Virgin Islands, Costa Rica, Marshall Islands, and Russia. This article explores relevant changes made to Latvian legislation this summer.
In an earlier MindLink article we evaluated transfer pricing (TP) challenges facing distributors in multinational groups and the scope for using Berry ratios in assessing whether the value of a controlled transaction is arm’s length. In this article we look at a practical example of how Berry ratios can be used, as well as discussing requirements and conditions you need to consider when it comes to segmenting your financial data.
Video surveillance may be treated as personal data processing by automated means if particular persons can be recognised in the footage. We often get asked if security cameras may be installed if they cover only an area, if nobody can be recognised in the footage, if the footage is not retained, etc. The scope of the General Data Protection Regulation (GDPR) excludes any personal data processing someone merely does as part of a private or domestic event. This article takes a brief look at steps you should take to ensure your video surveillance is lawful.
The current economic challenges, such as high inflation, scarce resources and pressures to increase profitability, continue pushing businesses towards a global dilemma: either motivate your workers to stay on with a pay rise and then say goodbye to your profit, or cancel your plans for higher pay and perks and then lose skilled workers. This dilemma might have you looking for some more efficient types of employer’s financial support with a low or no tax burden, such as non-taxable fringe benefits. This article offers an overview of exempt fringes and other useful tools employers can use to support their workers in the Baltic States.
Businesses often undergo changes during their lifetime as the national economy and legislation also keep evolving. Latvian reorganisation procedures had remained essentially unchanged for quite a while. Effective from 1 June 2023, the Commerce Act has been amended to change the procedures for conducting national and cross-border reorganisations of commercial entities. These amendments are quite extensive, so this article explores just a few aspects of changes to the national reorganisation procedures.
The world has changed magnificently over the last 100 years as technological progress and democratic principles have made society more open-minded, tolerant and equal. As these things move forward, there are still social challenges that need to be taken care of. The gender gap remains a relatively stable phenomenon to this day, even though females have gained equal rights with males. In 2010, social entrepreneurs established The EQUAL-SALARY Foundation, a non-profit organisation, to fight for pay equity around the world. In words that are easy to understand, the Foundation presents data from the International Labour Organisation’s Global Wage Report 2018/2019, which states that globally women are paid 20% less than men on average. In the light of publication of the EQUAL-SALARY Foundation’s annual report, we summarise key takeaways.
On 13 July 2023 the Cabinet of Ministers approved and issued Rule No. 407, which governs implementation of the EU Cohesion Policy Programme for 2021–2027 to promote innovative business development in small and medium-sized Latvian enterprises. The approved total financing for an assistance programme to be implemented by the Latvian Investment and Development Agency (LIAA) is EUR 73.38 million.
Regulation (EU) 2023/956 of the European Parliament and of the Council establishing a carbon border adjustment mechanism (CBAM) came into force on 17 May 2023. This so-called “carbon tax” applies from October 2023, with companies subject to CBAM being liable to file their first CBAM reports in January 2024. Carbon emission certificates will have to be purchased from 2026. In this article we are explaining in detail which companies are subject to CBAM.
The rapid evolution on a global scale leads to changes in all areas of life. What was once seen as something new and innovative has now become a standard, or it’s out of date already and in for a change. The evolving business environment entails changes to the workplace and workers’ needs, which means new challenges for employers. Diversity of benefits available to employees is becoming a key factor in assessing the workplace. According to statistics, activities promoting diversity of benefits have a positive effect on any company’s economic activity and worker productivity. Especially during the post-pandemic period, we could see employees expecting from their employers a package of benefits that’s flexible and tailored to their needs. We have written before about the advantages of flexible reward schemes. In this article we are looking at a new technology solution that will help companies improve their benefits packages by tailoring those to the desires of their employees.
We often spend a lot of time in Microsoft Office creating and formatting presentations and writing emails and reports. The advent of artificial intelligence (AI) means office workers can now save time on such tasks. We have written before about one of the most popular AI tools – ChatGPT and GPT-4, its operating principles, uses and restrictions (see our article on GPT-4 here). In this article we are continuing our tour of new technologies, looking at Microsoft as a leading AI creator for business purposes and its brand new AI assistant, Microsoft 365 Copilot.