taxes in latvia

Taxes in latvia

Taxes-in-Latvia

Along with tightening of regulations with respect to the offshore companies, entrepreneurs around the world have targeted their attention to the Baltic states with regards to more reliable options for tax optimization.

In accordance with the effective Corporate Income Tax Law shareholder's minimum holding of shares is not required as it happens in Malta, where the shareholder must have at least 10 % of the company shares.

Unlike most countries, the income originated from the sale of the company's shares is not considered as an income in Latvia, if it is owned by the shareholder within one year. This rule is making Latvia an attractive country for holding company structure creation, like Estonia, Cyprus and Malta.

Holding regime provides an exemption from Corporate Income Tax on dividends and capital gains, as well as relieves withholding tax on dividends paid to corporate shareholders. In other words, instead of paying 15 % personal income tax on capital gains after selling the asset, owner can pay 10 % as Corporate Income Tax, while receiving dividends.

General information on tax legislation in Latvia:

Minimum capital

EUR 1

Corporate Income Tax

15%

Tax on capital gain

15%

Double taxation relief

48 treaties

Dividend tax

0% (15% rate is applicable to all payments made to the offshore companies)

Interest tax

0% (15% rate is applicable to all payments made to the offshore companies)

Royalties tax

0%, excluding those paid to the offshore companies

Capital tax

No

VAT

Generally 21%

Tax audit

Annual report shall be audited, if only two of the following conditions are exceeded: a) total assets of at least EUR 355 718; b) net sales of at least EUR 711 436; c) average number of employees is at least 25

Transfer pricing rules

In accordance with OECD regulations (transactions between related parties should be held consistent with market prices and turnover should not exceed EUR 1 million, otherwise additional reporting is required)

Thin capitalization rules

Are effective, but paying interest to credit institutions in EEA or to the countries, which have a tax treaty with Latvia, capitalization rules are not applicable

Controlled foreign company rules

No

Advance payment of tax

Permitted

Why us

Our Advantages

 Advantages of Latvian Company

Tax benefits of Latvian Holding

  • Years of experience – hundreds of registered and sold companies in Latvia;
  • Advanced affiliate network, which consists of professionals with extensive knowledge in law, finance, accounting, investment, and taxation;
  • Our prices are much lower than that offered by the competitors for the same services;
  • Communication in English and Russian;
  • Free consultations, guidance, and advice.
  • Latvian company – is a great alternative to offshore companies;
  • Shareholders' liability is limited to the amount the shareholder has agreed to pay for his or her shares of LLC's (SIA) share capital;
  • Fast registration: from 2 to 4 working days, depending on company form and structure;
  • All the formalities related to company registration can be handled remotely, so there is no need for coming to Latvia;
  • Outgoing dividends paid to any legal entity – 0%
  • Incoming dividends received from a subsidiary – 0%
  • Capital gains on sale of shares – 0%
  • Outgoing interest and royalty paid to any legal entity – 0%
  • Stamp duty on share capital payments – 0%
   

Contact Us

UNITED AGENTS ​

Tel: +371 26133646
Tel: +371 28223563
Email: info@unitedagents.eu
Address: 76/78 Matīsa St. Rīga, LV-1009, Latvia

You are here: Home Taxes in latvia