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.

Companies in multinational enterprise (MNE) groups increasingly tend to enter into cost contribution arrangements (CCAs) for their joint projects.

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).

This article wraps up what we wrote last week.

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.

From time to time we hear about data protection breaches involving personal data emailed to the wrong recipient. The question is, what do you do if this has happened?

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.

Employee stock ownership plans are becoming increasingly popular as a way to boost staff motivation in companies around the world, including the Baltic States. The popularity of stock options is due to how they benefit both the company and the employee. Stock options give employees the right to receive or buy shares in their company after a specified period and for a price below the market value. The company benefits by having employees who are willing to work towards its goals and increase its stock value. Since the national rules for taxing this fringe benefit vary from country to country, it’s important to review the tax laws of Lithuania, Latvia and Estonia.

Globalisation means it’s common for companies to have their corporate clients and various procurement projects in countries other than their main place of business. To properly benefit from foreign procurement projects, it’s important to assess not only the benefits but also risks associated with such business opportunities, particularly tax risks. If your company has a permanent establishment (PE) in a foreign country, it’s important to be aware of the corporate income tax and payroll tax implications of operating there. In this article, we take a look at employment tax risks and key issues to consider.

This summer has brought many changes to the Commerce Act. Some of the amendments came into force on 1 June and others on 1 July. All these changes to a greater or lesser extent affect particular persons that are subject to the Commerce Act, and in this article we explore some of the effective amendments.

In June 2023, Parliament passed two extensive amendments to the Taxes and Duties Act effective from 1 January 2024. This was followed by a publication on the website of the State Revenue Service (SRS) detailing the new system’s objectives and explaining the meaning of taxpayer grades.

In our previous articles we discussed the transfer pricing (TP) aspects of guarantees and looked at methods that can be used to arrive at an arm’s length price. We will close out this series of articles with key insights from international case law and compare how the tax authorities treat the validation of guarantee transactions in a TP file.

Summertime sees school students entering the labour market more actively, and their first experience of paid work includes paying taxes. In this article we have summarised useful information that new workers and their parents should know.

One of the preconditions for securing positive customer experience is a robust organisational culture. Customer satisfaction is critical to any company seeking to maintain long-term profitability and competitiveness on the market.

In this article we will look at ways to automate processes using various solutions, that is, how to process incoming PDF invoices that are manually entered into your system, the easiest way to compare data between your systems, and what tools you can use for creating solutions.

In Latvia the rights and obligations of taxpayers and tax authorities, including the SRS, are prescribed by the Taxes and Duties Act and the State Revenue Service Act. Under this legislation, the primary onus is on the taxpayer to compute and pay their taxes to the government.

EU funds and other similar financial assistance instruments have provided support and contributed to the rapid growth, modernisation and development of many businesses. Given the large amount of information and various programme offerings currently available, it’s important to know how to navigate this maze and select assistance instruments that are suitable for your company. This will help you identify relevant assistance programmes, gauge the funding they offer, and understand the criteria for potential project applicants and applications.

Our experience suggests that intragroup services represent the most common centralised activities in a multinational enterprise (MNE) group and they are also transactions being scrutinised by the tax authority.

The crypto-asset sector has made changes to the payment and investment markets and challenged the tax authorities to trace capital gains arising on crypto-asset trades. On 16 May 2023 the EU Council supported the European Commission’s proposal to require crypto-asset service providers to report on transactions their EU customers perform in crypto-asset markets. This will help the tax authorities monitor crypto-asset trading and revenues, thereby reducing the risk of tax fraud and tax evasion. The reporting system is to be implemented with amendments to the Directive on Administrative Cooperation (“DAC”), which is the main system for exchanging data between the tax authorities. The new reporting rules have been passed in addition to the Regulation on Markets in Crypto Assets (“MiCA”) amending Directive (EU) 2019/1937, and to the Regulation on information accompanying transfers of funds, and these rules are fully consistent with the OECD’s crypto-asset reporting initiative.