Latvia published the Law on Ensuring a Global Minimum Tax Level for Large Enterprise Groups in the Official Gazette on 20 June, 2024. The law went into effect starting 21 June, 2024.
As previously reported, Latvia had chosen to postpone the implementation of the Pillar Two global minimum tax (GloBE) rules under Council Directive (EU) 2022/2523 of 14 December 2022. However, the country was still required to implement the Directive partially, including introducing relevant definitions, outlining the scope of the rules, and establishing reporting requirements.
The law does not yet include the main Income Inclusion Rule (IIR) and the Undertaxed Payment/Profit Rule (UTPR). These provisions will be introduced later and must be enforced on or after 31 December 2029.
The Pillar Two global minimum tax introduces the Pillar Two income inclusion rule (IIR) and the undertaxed payment/profit rule (UTPR) to ensure a minimum corporate tax of 15% for large multinational (MNE) groups with annual consolidated revenue of at least EUR 750 million in at least two of the preceding four fiscal years.
