On 30 January 2024, the Latvian Cabinet of Ministers passed a draft legislation, Law on Ensuring a Global Minimum Tax Level for Large Enterprise Groups, for the partial implementation of the Pillar 2 global minimum tax (GloBE) rules in accordance with the Council Directive (EU) 2022/2523. The draft law must be approved by the parliament (Saeima) and published in the Official Gazette to go into effect.
Latvia decided to postpone the full implementation of the GloBE rules. However, the country must still need to partially implement the Directive. As such, the Ministry of Finance finalized a draft legislation for partially implementing the Pillar 2 global minimum tax (GloBE) rules.
This includes introducing relevant definitions, specifying the scope of the rules, and establishing reporting requirements. It should be noted that the draft law does not currently include the main income inclusion rule (IIR) and undertaxed payment/profit rule (UTPR). These will be introduced later and must be applied no later than the fiscal year commencing on or after 31 December 2029.
