Associated companies frequently issue loans to each other, which must, like other transactions between associated companies, conform to market value. Currently, this issue has received additional topicality due to the fact that interest payments that exceed their market value are considered to be equivalent to dividend payments. This means that the issue of determining the [...]

Haulier Customer Conditions VAT position Latvia VAT payer Latvia VAT payer Freight transportation within the EU Haulier applies Latvian VAT (21%) Latvia VAT payer Other EU State VAT payer Freight transportation within the EU Haulier does not apply Latvian VAT. The Customer has to apply its country's VAT according to the reverse charge [...]

The companies have to pay the corporate income tax on profit distribution only, whereas the individual shareholders do not pay 10% dividend tax anymore. Introduction As of 1 January 2018, the companies are applying a conceptually new corporate income tax in Latvia. In this article, I have outlined the main features of the new [...]

Introduction In 2018 two important legal enactments were adopted which changed the regulations of the transactions between related parties starting from 2018 amendments to the Commercial Act and a brand-new Corporate Income Tax Act. Both of these acts impacted the transactions between related parties in its own way. 1. How the new corporate income tax [...]

Based on equal profits reported and fully distributed (after - tax) to individual shareholder. Latest news

The new Corporate Income Tax Act into force on 1 January 2018. One of the declared goals of the corporate income tax was to facilitate the companies’ capitalization and thus, “reinvesting” of the profits earned. Therefore, the corporate income tax is payable only when the dividends are distributed or if the company incurs expenses which [...]