Latvia

Latvia signs OECD Multilateral Instrument

Posted on

On 7 June, the Foreign Minister signed, on behalf of Latvia, the OECD Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting, which is to close loopholes in the current bilateral tax treaties and lessen the opportunity for tax avoidance.

At the same time, the signing of the Convention also implies making amendments to a large number of bilateral tax conventions which are outdated and not adapted to cross-border operations of modern companies.

Latvia: Government sign a Protocol to amend the double tax agreement

Posted on Updated on

The government signed a Protocol amending the Agreement for the Avoidance of Double Taxation with Singapore on 20 April 2017. The signing took place in Washington D.C. between Senior Minister of State for Finance and Law, Ms Indranee Rajah, and Latvia’s Minister of Finance, Ms Dana Reizniece-Ozola.

The Protocol lengthens the threshold period for determining the presence of a permanent establishment, and lowers the withholding tax rates for dividends, interest, ­­and royalties. These changes, and other changes, are expected to enhance cross-border investment, and boost trade and economic flows between the two countries.

The Protocol will enter into force after its ratification by both countries.

Latvia: Parliament approves the treaty signed with Japan

Posted on

The parliament of Latvia on 2 March 2017 approved the Japan-Latvia income tax treaty. The agreement was signed on 18 January 2017.

According to the agreement, royalties will be exempt from withholding tax and would lower withholding tax on interest and dividends beneficially owned by a person other than an individual to 10%. The agreement also includes a key purpose test to prevent tax treaty abuse.

Singapore: Competent authority agreement on automatic exchange of information with Latvia enters into force

Posted on Updated on

The Competent Authority Agreements (CAA) agreements to exchange financial information for tax purposes under the Common Reporting Standard between Singapore and Latvia entered into force on 27 February 2017.

According to the agreement, the Inland Revenue Authority of Singapore (IRAS) will automatically exchange information with the revenue authority of Latvia about the Singaporean financial account of a Latvian resident and Latvian revenue authority will exchange information with the Inland Revenue Authority of Singapore about the financial account information held by Singapore tax residents in Latvia.

The first exchange of information will take place by September 2018 and the first submission by Singapore financial information is scheduled for 31 May 2018.

Latvia: Amendments law on Micro-Enterprise tax enters into force

Posted on

Latvia’s President Raimonds Vejonis has promulgated two legal amendments that the country’s legislature, the Saeima, adopted on December 20, 2016; the changes came into effect on January 1, 2017.  The changed laws cover the taxation of microenterprises and the social security system. The following tax regime for the micro-enterprise tax payers was approved:

  • no minimal social insurance contributions (this tax is included in the micro-enterprise tax);
  • increase of micro-enterprise tax rate from 9% to 15% from the turnover for companies with the turnover between EUR 7 001 and EUR 100 000 per year;
  • increase of micro-enterprise tax rate from 9% to 12% from the turnover for the smallest businesses with yearly turnover of up to EUR 7 000 (this reduced rate is valid only for year 2017).

Additional changes include eliminating the deadline for registering as payers of the microenterprise tax, which had been set as June 30, 2017, and permitting existing microenterprise tax payers to continue in the status beyond the previous limit of December 31, 2018, without registering as corporate or personal income tax payers by December 15, 2018, as had been required.

Saudi Arabia- Initiating Income and Capital tax treaty with Latvia

Posted on Updated on

Following the conclusion of the negotiation process in Riga from 16 to 19 January 2017, the government of Saudi Arabia and Latvia will initiate an income and capital tax treaty.

DTA between Japan and Latvia signed

Posted on

The governments of Japan and Latvia signed their first tax treaty in Tokyo on 18 January 2017. The treaty will come into force when the two countries have ratified the provisions and notified each other of the completion of procedures.

According to the agreement, royalties will be exempt from withholding tax and would lower withholding tax on interest and dividends beneficially owned by a person other than an individual to 10%. The agreement also includes a key purpose test to prevent tax treaty abuse.