The updated protocol to the Germany-Latvia income and capital tax treaty came into effect on 23 June 2024, as reported by the Latvian online legal information database.
The protocol, signed in Riga on 29 September 2022, will apply from 1 January 2025. It introduces several key amendments to the Germany-Latvia tax treaty and implements the OECD’s minimum standards for tackling base erosion and profit shifting in tax treaties.
Article 9 of the protocol adds provisions for corresponding adjustments regarding associated enterprises, and Article 11 allows for a potential exemption from German tax on certain interest payments related to loans guaranteed by Latvian state entities.
Article 13 addresses the taxation of gains from the sale of immovable property and shares deriving value from such property.
Updates to Article 25 include enhanced cooperation between authorities in the mutual agreement procedure, and a new Article 26A prevents treaty abuse by denying benefits where arrangements primarily aim to obtain tax advantages.
The protocol will take effect from 1 January 2025.
