Transfer pricing

Transfer pricing services mostly include drawing up the transfer pricing documentation in accordance with demands of regulatory enactments of Latvia and OECD transfer pricing guidelines.

Depending on what the client needs, the transfer pricing documentation can be drawn up fully, including such articles as an overview of the industry, group analysis of the company, functional analysis, methodology of transfer prices, and analysis of comparable data by using the AMADEUS database created by Bureau van Dijk. In separate cases, our services include the methodology of transfer pricing and services of selecting the comparable data only.

We also provide consultations on transfer pricing issues and organize training and seminars on transfer prices and other tax-related issues.

Additional information about transfer prices is available at: www.transfertcenas.lv.

VAT Services

VAT services are one of our key focus areas, we provide daily value-added tax services as well as make complex tax issue examinations. A brief description of what we do in relation to value-added tax is provided below.

VAT Compliance

We will help you to find an optimal VAT position for current or planned business activities. Our experienced and well-equipped specialists will assist you with VAT planning and compliance both internationally and locally.

The VAT compliance services typically include:

• VAT registration and de-registration
• preparation and submission of the VAT monthly, quarterly and annual VAT returns
• seeking a ruling or opinion of the State Revenue Service or Ministry of Finance with respect to VAT matters
• VAT day-to-day consultancy.

VAT consultations and planning

Whereas the tax laws are becoming more demanding, the planning of business involves more in-depth knowledge of the tax laws and practices. Our professionals are experienced so they can assist you in navigating through the complex tax and legal matters. Typically, we provide the VAT consulting services for the following:

• local and international VAT issues
• application of the VAT in mergers and acquisitions, e.g. sale of shares, the sale of a business as net assets
• application of VAT for holding companies, e.g. VAT recovery for management services supplied
• VAT implications of real estate transactions: sale/purchase, refurbishment, construction etc.
• VAT simplifications on international transactions:
  • consignment/call-off stock
  • triangulation
  • importation in bonded warehouses,
  • distance selling etc.

• VAT grouping
• Input VAT deduction
• application of VAT to financial services
• VAT litigation
• Training on VAT issues
• VAT reviews

Special VAT regimes

There are a few special VAT regimes available, which along with 0% corporate income tax make Latvia attractive place for business:

• simplified import regime (applying 0% VAT on importation)
• VAT Mini one-stop shop (MOSS) regime

We provide assistance in the planning and implementation of the special VAT regimes, as well as, to ensure VAT compliance.

Assistance in VAT audits and litigation

• Assistance in the tax disputes with the State Revenue Service regarding VAT issues
• Appealing the decision of the State Revenue Service and representation in the court.

VAT refunds

• Review of the VAT payer’s entitlement for a refund and assistance during the VAT refund process
• Consulting regarding the VAT rules and regulations
• VAT refund applications and documents
• Liaisoning with the Latvian State Revenue Service during the VAT refund process.

VAT reviews

We will carry out the tax examination to find out the errors and omissions related to output and input VAT:

• recovery of input VAT
• verification of source documents
• verification of the VAT returns
• testing permanent establishment and the fixed establishment
• application of Latvian and foreign VAT. [/read]

Company formation in Latvia

Before establishing a company, our team will provide you with all the information needed for your business, will provide consultations about establishing a company, and the applicable taxes and will provide an insight into other demands, which are connected with the realization of business activities in Latvia.

By establishing a company in Latvia, the possibility to execute legal transactions with both European Union companies, and companies, which are located in Eastern Europe is ensured. Because Latvia is a European Union member state, its companies have ensured access to the European Union’s market. Particular attention should be paid to such advantages of Latvia: the favourable geographical location, knowledge of Russian and information about the market provides a chance to get into the market of Eastern Europe.

The competitiveness of Latvia is increased by the introduced tax relief. In addition to them, the corporate tax rate in Latvia for undistributed profits is 0% (20% tax is payable upon distribution of dividends), besides tax relief is introduced for long-term holding of shares.

Legislation in Latvia is focused on the promotion of business and it ensures equal regulatory enactments for both foreign and domestic investments. Latvia has a friendly environment for the realization of business activity, which ensures access to a reliable and qualified workforce, developed infrastructure which complies with international standards, and lower business maintenance costs in comparison with a lot of member states of the European Union. In addition, in a World Bank research “Doing Business Survey 2012” which inspects the business environment, Latvia has been ranked in 21^th place in the list of most favourable countries for the realization of business activities.

Registration of a company in Latvia often ensures a decrease in administration expenses for the entrepreneurs, giving them a chance to invest the resources saved in the development of the company. The favourable tax structure for holding companies ensures a decrease in taxable sums and an effective repatriation of profit tax.

Accounting and audit

Accounting services include both everyday accounting services and complex business activity support services, which include relevant legal services, tax planning, and other services.

Our everyday accounting services are:

• Accounting of companies, foreign company subsidiaries or permanent establishments in accordance with regulatory enactments of legislation of the Republic of Latvia;
• Tax accounting, drawing up and submitting tax reports for state institutions;
• Representation in SRS and other state institutions;
• Drawing up and submitting VAT declarations;
• Drawing up annual reports;
• Statistics report for Central Statistical Bureau, Bank of Latvia;
• Annual tax declarations;
• Drawing up statements and reports for the members or shareholders.

We provide the company’s finance audit (reviews) and related services in cooperation with qualified auditors:

• Audit or review of company’s financial statement;
• Inspection of the internal control system;
• Inspection of company’s reorganization;
• Inspection of reports on liquidation of the company.

All previously mentioned services are provided in accordance with International revision standards and laws of Republic of Latvia.

Structuring transactions

We develop and help make transaction structures:

• holding companies (using holding modes of Latvia and other countries);
• trade of goods (structuring business, companies, subsidiaries, permanent establishments);
• structuring of intellectual property (trademarks, patents);
• funding structures (loans and finance instruments).

The world of transactions is becoming more transparent resulting in many structures of transactions, which were successfully used before 5 to 10 years being left in the past. In structuring transactions, such principles as transparency of the transactions, and coordination of making a profit with the activities implemented should be considered more. In that respect, we offer to evaluate the previous structures and to develop the necessary changes in them.

Valuation

Our experts have been included in the evaluation of capital contributions expert’s list of the Register of Enterprises of the Republic of Latvia, having rights to evaluate and give their opinions in such industries:

• Entrepreneurial activity (for example evaluating a company in case of restructuring);
• Intellectual property (trademarks, licences, patents);
• Debts/liabilities subject to capitalisation;
• Shares.

We have considerable experience in providing the evaluation of capital contributions by rendering services to both Latvian and international companies. The evaluation is carried out according to the specific character of the company, and it reflects the possibilities and future perspective of the object under evaluation in the current situation.

By summing up situations, in which evaluation of the company or business is desired, such cases can be separated:

• Reorganisation and joining of companies;
• Securing the owner’s property interests;
• Purchase-sale transactions of shares;
• Planning of business and investments;
• For Register of Enterprise, for justification of capital contribution in the fixed capital of the company;
• Selling the shares between the connected undertakings, to prove compliance of the transaction to demands of transfer prices to the State Revenue Service;
• For planning investments and business.

Evaluation is provided by implementing evaluation methods that are approved internationally.[/read]

Finance services

By cooperating with qualified finance experts we provide in-depth finance consultations and services of the finance director, which involves services such as:

• Establishing prime cost;
• Price calculations;
• Analysis and preparation of cash flow;
• Preparing a budget;
• Attraction of funding.

Services are provided to both Latvian and foreign companies. Finance services are used in cases when it is necessary to establish goods, area of business, cost-efficiency of investments, develop complicated finance calculations, draw up or improve the budget, etc.

Legal services

We provide the necessary legal services in the commercial rights area. Legal services include:

• Choice of the company’s type (capital company, subsidiary, permanent establishment);
• Registration of capital company, and other business forms;
• Registering changes in the Register of Enterprises;
• Drawing up the legal documents (contracts, etc.);
• Intellectual property rights;
• Immigration rights;

Representation in the State Revenue Service and Administrative courts.