New amendments to VAT Act take effect from 1 June (1/20/17) (0)

18.05.2017

Passed

New amendments to the VAT Act were published on 10 May, which Parliament had been debating since October 2016 but didn't pass until 20 April 2017. The amendments come into force on 1 June, except for those relating to the direct application of zero-rating to supplies of goods and services to Allied Headquarters staff members and US diplomats, which come into force on 1 January 2018. This article explores what we see as key changes. Read more..

Core principles of Estonian corporate tax system (2/20/17) (0)

18.05.2017

Draft

The Latvian Cabinet of Ministers’ decision of 9 May 2017 to support the draft national tax policies for 2018–2021 has made it clear that the next six months will see significant changes to the Latvian tax system. Confirming the intention announced earlier to move the Latvian corporate income tax (CIT) regime closer to the Estonian model, the proposed policy solutions provide for reforming the CIT system from 1 January 2018 to charge a 0% tax on reinvested profits and a 20% tax on gross profits at the time of distribution. With the proposals still at a developmental stage, this article explores the Estonian model to discover how the so-called 20/80 tax rate principle works. Read more..

Various levels of process efficiency (3/20/17) (0)

18.05.2017

Practice

In an earlier edition of Flash News we wrote about the three main reasons that hinder process efficiency improvements: lack of clarity about goals and how to achieve them, staff resistance to change, and inability to achieve efficiency in the long term. This article takes a look at potential solutions to these problems. Read more..

CJEU ruling on reverse charge VAT (1/18/17) (0)

12.05.2017

Practice

The reverse charge procedure is usually deployed to fight VAT fraud. Latvia has already adopted this procedure for six types of transactions, and there are plans to cover more. However, tax experts say that in certain industries (such as construction) the areas where reverse-charge VAT should be applied are not clearly defined, and so the taxpayers face the risk of additional VAT assessment should the State Revenue Service (SRS) find that the procedure has been applied incorrectly. Since we are aware of such disputes with the SRS, this article explores ruling C-564/15 made by the Court of Justice of the European Union (CJEU). Read more..

Transfer pricing risk analysis: risks taken under contract and their functional analysis (2/18/17) (0)

12.05.2017

Practice

This article explores steps 2 and 3 of the risk analysis according to the OECD’s BEPS comments. Step 2 determines how related companies contractually take particular economically significant risks under the terms of the transaction. Step 3 uses a functional analysis to find out how the related companies operate in terms of taking and managing the economically significant risks. To gain an insight into these steps, let us consider an example transaction between a manufacturer and a distributor who are related parties. Read more..

 
© 2017 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.  | Last updated: 27.04.2017