Flash News is the latest information on proposed and effective changes in tax and business legislation. We aim to save you time by monitoring the latest developments and bringing key points to your attention.

• A foreign company’s Latvian branch in a VAT group (1/30/10)
  27 July 2010

  Issue
  The VAT group is still a new concept for Latvian businesses and tax authorities to grasp. A key advantage of the VAT group is that supplies between its members attract no VAT. This article explores more opportunities for optimising VAT costs through a VAT group. Read more »
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• New VAT refund arrangements (2/30/10)
  27 July 2010

  Passed
  Sections 12.2 through 12.11 of the VAT Act are now in force, laying down the procedure for refunds of VAT credits arising after June this year. Read more »
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• Is it possible to hide information outside Latvia? (3/30/10)
  27 July 2010

  Issue
  The amount of information at a related company’s disposal often plays a key role when setting transfer prices in dealings with related foreign companies. For example, the parent company may incur management fees in several subsidiaries, but the Latvian company may have no information about the underlying costs of management services being acquired. This article explores what can happen if a Latvian company is unable to give adequate information about its transactions with related companies on a tax audit conducted by the State Revenue Service (SRS). Read more »
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• What’s new in corporate income tax? (1/29/10)
  20 July 2010

  Draft
  Parliament is about to debate a set of amendments to the Corporate Income Tax (CIT) Act in their second reading. These amendments are necessary to align the provisions relating to the proposed tax treatment of microbusinesses and to clarify how a tenant may adjust taxable income for leasehold improvements after a lease agreement is terminated. This article takes a look at the forthcoming changes in the CIT Act. Read more »
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• VAT treatment of mortgaged property auctions (2/29/10)
  20 July 2010

  Issue
  The present economic situation is increasingly forcing banks to repossess and auction mortgaged assets. Some of the issues arising from such auctions were debated during a recent PwC hosted discussion on the VAT treatment of mortgaged asset sales. We invited the largest Latvian banks to take part in this discussion highlighting some of the problems that forthcoming changes to the VAT Act may bring. Since the matters we discussed are likely to interest a wider circle of readers, this article offers a summary of the discussion. Read more »
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