Ever-changing legislation puts additional pressure on businesses and individuals. To make sure you haven’t missed any important changes and to spot potential risks early, the best solution is to keep up with the changes and know your way around the relevant resources.
We have already commented on the corporate income tax (CIT) treatment of flow-through dividends and looked at personal income tax (PIT) relief available to an individual receiving a dividend. This article explores potential pitfalls in the tax treatment of flow-through dividends if a change of shareholder takes place shortly before the company decides to distribute a profit.
This article explores the corporate income tax (CIT) and personal income tax (PIT) treatment of financial transactions between a Latvian company and its owner (an individual) in two examples:
A Latvian company in a vertically structured group often receives dividends from subsidiaries and pays them on to its owners. Such flow-through dividends qualify for a special relief under the Corporate Income Tax (CIT) Act: if certain conditions are met those dividends are taxed only once even if tax has been paid abroad. In practice various situations may arise, for instance, a dividend is received and paid in different periods, the profit may not have been taxed in the payer’s country, the Latvian company receives the dividend net, i.e. after tax has been withheld in the payer’s country. This article explores some relevant examples.
To begin the new training season, PwC’s Academy offers everyone interested, whether you are in Latvia or abroad, an opportunity to gain valuable knowledge of taxes and other relevant business topics online.
In October 2019, the State Revenue Service (SRS) published an advance tax ruling on the corporate income tax (CIT) and personal income tax (PIT) treatment of dividends paid out of profits formed by proceeds from selling a subsidiary. The ruling answers some long-awaited questions about the tax implications.