Setup your Business in Latvia
ABM Global Accountants provides highly qualified services relating to registration of enterprises in Latvia, and provides an individual approach to find a solution in your situation. We also ensures loyalty, confidentiality and the fastest fulfilment of duties to register company in Latvia.
Corporate income tax in Latvia
The object upon which the corporate income tax is imposed is the taxable income obtained by a tax payer during a taxation period. The tax base is corporate financial income adjusted according to the law. The adjustments are mainly implemented in order to ensure that the income is greater than expenses on which the tax is not levied (for example, expenses that are not directly related to economic activity) or in order to reduce the income by a specific amount in case if the law envisages tax relief.Corporate income tax payers are the following:
Resident or domestic companies performing economic activity, organisations and institutions funded from the state budget or municipal budgets, which obtain income from economic activity;
Non-resident or foreign companies, business entities, natural and other persons;
Permanent representative offices of non-resident undertakings the income tax rate of which is 15 %.
Individual undertakings are payers of the personal income tax, and the tax rate is 26 %.
A company is considered to be a resident of Latvia, if it is registered in Latvia according to Latvian laws and regulations.
Taxation of dividends
Payments of dividends between domestics companies are not subject to corporate income tax. Dividends paid to a legal entity – a resident of a European Union member state or a resident of the European Economic Area – are exempt from taxation.
Taxation of income of non-residents
Corporate income tax inLatviais applied to the following payments to legal entities – non-residents, if they do not have a permanent representative office inLatvia, in accordance with tax rates stipulated in the Corporate Income Tax Law:
Management and consulting services – 10%;
Income from investments in a partnership – 15%;
Compensation for the use of property located inLatvia– 5%;
Compensation for expropriation of property located inLatvia– 2%;
Latvian VAT rules are based on regulations drawn up by the EU, of which Latvia was a founding member. The Standard Latvian VAT rate is currently 21%, with a reduced rate of 12%. As an EU member, Latvia is obliged to implement the EU’s VAT Directives which provide guidance on VAT. Where there is a conflict, the European Directive takes precedence.
21% – All other taxable goods and services.
12% – Food products for infants; pharmaceutical products; medical products for disabled persons; public transport; books; newspaper and periodicals; hotel accommodation.
Our services in Latvia
We provide following services in Latvia through our affiliates, which are fully authorised agent of Valstsieņēmumudienests:
Business start-up advice
Bookkeeping and bank reconciliations
Fully outsourced accounts department
Payroll support or fully outsourced payroll managed by us
Tax returns for companies and individuals
VAT refund and payments
Double taxations reliefs
Taxation advice for individuals
Specialist corporation tax services
Property and land transactions planning
Business development and consultancy
Compliance services with local tax authorities
If you are looking for more customised service, please get in touch with one of our expert today.