To pick up where we left off in our earlier article Ways of reducing tax on profit distribution, which discusses how to minimise your corporate income tax (“CIT”) liability when distributing “new” profits, this article explores some personal income tax (“PIT”) relief an individual can take even if the company has already claimed one of the available CIT reliefs according to the current practice.
Having the status of a public benefit organisation (“PBO”) not only demonstrates that the organisation is working for the public good but also motivates the PBO to raise donations and receive various tax and other advantages. Donations are a key source of various PBO public benefit projects, while donors can claim tax advantages. The Ministry of Finance (“MOF”) has issued an informative report on the activities and development of PBOs. This article offers a brief summary and looks at what companies think about this relief and whether it has promoted PBO operations.
Latvian companies often approach foreign organisations or individuals to draw on their expertise and receive advice on matters that are crucial for the Latvian company’s growth. This assistance is best received from a group company in the form of management services or consulting services but the Latvian company may have to hire an unrelated foreign company or personal consultant. This article explores Latvian tax implications (including for the Latvian company) and how to tell whether it is personal income tax (“PIT”) or corporate income tax (“CIT”) that is chargeable primarily.
As the vacation season is approaching, so is the implementation of the controversial minimum income subject to mandatory national social insurance (“NSI”) contributions, which might affect many companies from 1 July 2021. On 24 May, however, the Parliamentary Presidium presented proposals for amending the NSI Act to a committee, urging a deferral of the effective date of the earlier amendments. This article describes the basic principles for applying the minimum NSI income and offers practical examples in case the bill is not approved and the new rules come into force from 1 July.
On 27 May 2021 a meeting of state secretaries heard the announcement of draft rules to be issued by the Cabinet of Ministers, which provide for adopting the minimum and maximum income that is subject to voluntary national social insurance (“NSI”) contributions and to mandatory contributions for self-employed persons. This article explores the new draft rules, which are to replace Cabinet Rule No. 1478 of 17 December 2013.
Effective from 1 January 2018 the Latvian tax system has undergone important changes affecting the taxation of personal income, including dividends. This article examines some of the changes in the tax treatment of dividends from Latvian sources and their impact on Latvian, Estonian and Lithuanian taxpayers.
Idleness benefit and aid for wage subsidy are paid to workers for the period from 9 November 2020 to 30 June 2021. This article summarises key aspects a payroll accountant needs to consider when calculating average earnings for a worker that has received payments as part of state aid for companies affected by the Covid-19 crisis. The annual income tax filing season usually causes workers to scrutinise their income and it becomes important to correctly calculate income for past periods.
The Covid-19 pandemic has changed everyone’s life. With live entertainment still restricted, companies are holding online events that offer a prize to the winner of a competition. This article explores the tax treatment of prizes using a practical example.
On 4 September 2020 the Administrative Division of the Supreme Court ruled on case No. A420190717 SKA-383/2020 concerned with the personal income tax (“PIT”) treatment of a property contribution. The ruling reinforces the understanding of how PIT is deferred for an individual that has contributed capital assets (e.g. real estate or trademarks) to a company’s share capital in exchange for shares.
In last week’s edition of Flash News we outlined the VAT treatment of companies offering free meals to their workers during working hours as well as transport between home and work to ensure business continuity especially during the Covid-19 crisis. This article explores the personal and corporate income tax implications of this practice.
To mitigate the adverse effects of the Covid-19 pandemic, amendments to the Covid-19 Act were adopted by Parliament on 18 March and came into force on 20 March 2021. This article explores changes in how individuals file their annual income tax return and how taxes are calculated.
Employee stock option plans are gaining traction as a tool for motivating employees in Latvia. Employees elsewhere in the world have for years been able to become company shareholders, which has boosted their contribution to their company and its growth. The grant of employee shares or stock options is essentially a type of employee compensation linked to the company’s development (profitability).
The United Kingdom (“UK”) left the EU at midnight on 31 January 2020. The Brexit agreement provided that EU nationals staying in the UK until the end of the transition period would keep the social rights that go with EU citizen status, i.e. the opportunity to apply for various benefits, pensions and other social entitlements in the UK, similar to living in other member states. The Trade and Cooperation Agreement signed on 30 December 2020 is applied provisionally from 1 January 2021 pending ratification at EU level. The Agreement includes a separate protocol on social security coordination. This article explores some key changes in social security to be considered by employers after Brexit and in the light of the new agreement.
PwC specialists share their experience on topical tax issues.
PwC offers a brief video on the impact of COVID-19 on Transfer Pricing in Central and Eastern Europe.
The annual survey of Baltic business leaders examines the mood and opinion of entrepreneurs about business challenges and development perspectives. In addition to the questions asked in the global survey, we asked the managers of the Baltic companies to answer some questions about the aspects of the local economy.