We have written before about the popular artificial intelligence (AI) tool, ChatGPT, from both a functionality perspective and a data protection viewpoint. This article explores the latest trends in using generative AI (GenAI) and offers some AI business predictions.

We have informed our MindLink subscribers about the Pillar Two directive’s guidelines, looked at how implementing it could affect companies, and suggested how companies could get ready for the tax changes in good time. This article explores what’s new when it comes to passing the Pillar Two directive into Latvian law.

On 21 December 2023 the Court of Justice of the European Union (CJEU) passed ruling C-288/22 on whether a public limited company’s board members are taxable persons for VAT purposes. This ruling is important because it explains what criteria must be met if a person is to be treated as carrying out an economic activity that forms the basis for paying VAT and what factors should be considered to determine whether someone is an independent taxable person.

To get ready for implementation of the Corporate Sustainability Reporting Directive (CSRD), in this article we are looking for the answers to why an external review of sustainability reports is necessary, what review procedures are expected, and how we can prepare ourselves for this change.

On 17 October 2023 the EU amended its blacklist of uncooperative tax havens that are subject to special taxation procedures. The blacklist now contains 16 jurisdictions, including Antigua and Barbuda, Belize, the Republic of Seychelles, and Russia. As 2023 saw the list being amended several times, there are certain tax aspects that may raise questions, yet national law does not always provide the answers. In this article we take a look at what the Ministry of Finance (MOF) and the State Revenue Service (SRS) think about the tax treatment of a Latvian-resident individual’s income from a substantial participation in a foreign company, including dividends from a blacklisted tax haven.

In today’s fast-changing employment space, the status of workers has become a subject for legal, social and economic debate. Recent years have seen significant changes to the labour market and to the traditional perceptions of employment, in particular as a result of Covid-19.

Have a great New Year! By tradition we put together information on the legislation and amendments affecting the calculation of personal income tax (PIT), national social insurance (NSI) contributions and solidarity tax (ST) on wages and salaries. This article explores the changes for 2024 so you can get ready for a successful financial year.

In our previous article we offered an introduction to aspects a family business needs to consider when it comes to operating in a different jurisdiction after relocating their company or setting up a new one. In this article we’ll be exploring the regulatory framework and legal structures as well as the tax regime, based on PwC guidelines.

Court ruling No. SKC-165/2023 was published last November. While it does not address any fresh legal issues, the subject of worker postings combined with the significant amount of this claim creates the need to analyse this ruling in more detail. The pay components assessed in the ruling allow us to summarise and evaluate pay issues relevant to any worker posting.

On 7 December 2023 Parliament passed amendments to the Personal Income Tax (PIT) Act in their second – final – reading. As part of the 2024 budget bills package, these amendments were debated as a matter of urgency, with two readings only. This article explores what we see as key changes, including new products added to the basket of allowable expenses, compensation for remote work, and other exempt income groups that will have their exemption thresholds increased from next year.

We have written before about the profit split method (PSM) and its potential in transfer pricing (TP) analysis, looking at the essence of this method and the scope for using it. This article explores PSM’s advantages and disadvantages.

In its ruling C26128713, SKC-201/2019 of 28 June 2019, the Supreme Court took a different view on the VAT Act’s condition that the taxable amount should include only taxes payable in relation to a supply of services. The dispute involved a forced lease of land that stipulated a rent plus a compensation of real estate tax (RET). The Supreme Court was assessing whether VAT should be charged on the compensation. First of all, the assessment focused on what items attract RET and who is liable to pay it.

In early 2019 we wrote that all listed companies would have to file consolidated statements in ESEF from the financial year 2020 onwards. The rollout of this format was postponed, however, and it applies starting from the financial statements for 2021.

Company board members should carry out their duties as honest and diligent stewards at all times.The content of the phrase “as an honest and diligent steward” has been deliberately left undefined in the law, and so this should always be tailored to find a fair solution to each dispute.

Where lease services are supplied for a consideration, any person (including a public entity or a derived public entity) will be treated as a taxable person for VAT purposes unless the consideration received is a token sum. So the lease service will be a supply governed by the VAT Act. This article explores whether real estate tax (RET) collected from the tenant in addition to the rent qualifies as part of the rent and whether VAT should be charged on it.

In a recent survey conducted by PwC, 52% of CEOs cite labour and skills shortages as a critical factor affecting performance in their company. Companies are objectively facing shortages of suitable workers and required skills, and rapid technology evolution is likely to aggravate this. The situation is being worsened by the diminished engagement and loyalty of workers and by their readiness to change jobs if they fail to receive values they deem critical, such as meaningful work and professional development opportunities. This means your priorities should include developing your current workers as well as attracting new talent.

Family businesses play a significant role in the global economy. This is a form of company in which a family holds the majority of shares. The Covid-19 pandemic as well as geopolitical and other circumstances have posed many challenges, so in this series of articles we will be looking at various factors that family companies considering changes to their business need to evaluate. The first article explores the location (jurisdiction) aspect. This question is particularly relevant to a family business in which one of its decision makers is likely to move to live in another country or to expand their business abroad.

Many people see the high cost of living as a challenge that forces the public and the government to take steps in order to obtain protection from today’s unpredictable economic conditions. While every worker deserves to receive a wage that allows them to satisfy their needs and live a decent life, the UN recognises that more than a third of workers globally earn less than they need to secure such a standard of living. The problem remains unsolved in 2023, so this article summarises the various challenges that companies need to overcome if they are to implement what is known as a living wage.

The administrative courts occasionally hear disputes between the State Revenue Service (SRS) and associations either over their obligation to pay tax because it turns out that the overt or covert purpose of forming an association was to make profits or capital gains for its members, or over breaches allowing the SRS to delist the association as a public-benefit organisation. In either case the bone of contention is a business the association conducts in addition to its core activity, which the SRS assesses differently and perceives as an irregularity.

Moving towards a more environmentally friendly and energy-independent urban development in Riga, in October 2022 the Riga City Council passed amendments to Binding Rule No. 109, Procedures for granting real estate tax relief in Riga, which set up a new category of real estate tax (RET) relief – a 50% relief for energy-efficient buildings to be delivered for occupancy after 2023.

Accountants working for Latvian service providers tend to feel confused when they find out that their foreign business partner has a VAT registration number not only in his country of establishment but also in Latvia. What does a foreign trader get a Latvian VAT number for? And how does that affect service providers in Latvia? Read on to find out more.

We have analysed the CIT treatment of doing business with companies on the blacklist of uncooperative tax havens earlier. This article explores new changes to the list and how they affect transfer pricing (TP).

The autumn months have been prolific with tax changes, yet some of the tax aspects, including temporary ones, might remain unchanged. The Finance Ministry has proposed many amendments to the Personal Income Tax (PIT) Act, including an extension of the special tax scheme for royalty recipients who are not registered as economic operators. This article explores the proposed extension of the transitional royalty scheme and how this will affect its users.

The Finance Ministry has come up with a number of proposals for amending the VAT Act from 2024. The goals are to improve the VAT rules by exempting VAT on services that are closely linked to sports, to minimise the administrative burden, to encourage improvements to the business environment, and to revise the conditions for how registered taxable persons can adjust input tax paid on bad debts. The proposals must be approved in their second reading by Parliament before they can take effect. This article explores what we see as key changes to the VAT Act.

We have informed our MindLink subscribers that in late 2022 the European Commission (EC) published proposals for amending the VAT directive (2006/112/EC) and Council Implementing Regulation (EU) No. 282/2011 to upgrade the EU VAT system and increase its resistance to fraud. Known as ‘VAT in the Digital Age’ (ViDA), the EU VAT reform aims to modernise and simplify the VAT rules for platform economy members by introducing mandatory real-time digital reporting and e-invoicing for all intra-Community B2B transactions. This article explores the latest developments and the potential reforms, focusing on e-invoicing practices.

The State Revenue Service (SRS) has so far conducted several types of review to examine a taxpayer’s tax payments for compliance with statutory requirements.

Under the Civil Code, a gift is a legal transaction whereby someone gives an asset to another person for free out of generosity. While a gift is mainly associated with something pleasant, there may be risks and questions – read on to find out more.

The European Sustainability Reporting Standards (ESRS) require organisations governed by the Corporate Sustainability Reporting Directive to carry out a dual materiality assessment aimed at identifying environmental, social and governance (ESG) areas that are material to them. Unlike the previous practice, which had these areas identified according to the impact made by an organisation, the new methodology adds a further level of analysis assessing the financial impact ESG areas have on the organisation in terms of risks and opportunities.

Today a lot of attention is being paid to protecting wildlife and improving the environment. Natural resource tax (NRT) is one of the instruments that helps protect the environment. The Cabinet of Ministers has approved and passed to Parliament for review a set of proposals for amending the NRT Act aimed at promoting economical and efficient use of natural resources and limiting environmental pollution. According to available information, some of the amendments are to come into force on 1 January and the rest on 1 July 2024. We informed our MindLink.lv subscribers about some of the proposals on 5 May 2023. This article explores how the NRT Act is to change.

To embed sustainability aspects in its core business, an organisation should be aware of effects it has on the environment and on its stakeholders, as well as how the environment and stakeholders affect its business. Embedding sustainability aspects in business is a process that encourages the organisation to revise its business model and overall strategy, as well as gathering and analysing data for use in decision-making to identify and mitigate risks affecting it. This article offers a brief overview of the sustainability or ESG framework, focusing on “G” for governance. We are zooming in on tax governance as a sustainability aspect that we encourage organisations to embed in their core business.