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Amendments to the Law on Immigration of Latvia
On January 1, 2018, the amendments to the Law on Immigration came into effect, which provide the elimination of exceptions for certain categories of foreigners who did not have to pay a state fee for the first time by repeatedly requesting a temporary residence permit.
New changes in the Immigration Law of Latvia
On March 2, 2017 the new amendments to the Immigration Law of Latvia (hereinafter referred to as  - the Law) came into effect, according to which several new grounds for obtaining a temporary residence permit in Latvia (hereinafter referred to  as –TRP), as well as the conditions for obtaining a TRP on the basis of registration of a representative of a foreign merchant.
Член Торгово-промышленной палаты Латвии Latvijas Tirdzniecības un Rūpniecības Kameras biedrs Member of the Latvian Chamber of Commerce and Industry

About Us

Since its foundation in 1996 the law office “INLAT PLUS” has been one of the most active and leading companies providing legal service in Latvia. The variety of the qualified legal services provided by the company will meet the most demanding requirements of its clients (legal and physical persons).

Contact information

Address of the office:
E-mail:
Brivibas 40-15, LV-1050, Riga, Latvia ip@inlatplus.lv
Phone:
Fax:
(+371) 67505970
(+371) 26403577
(+371) 67505978

Tax regime for Latvian holding companies

As of 2013 Latvia has adopted favourable tax regime for Latvian holding companies. Essence of holding regime: a company owns other company shares and its main income are dividends. Holding is an intermediate link between a natural person, actual recipient of income and structures of the whole network.
 
Advantages: systematization and adjustment of assets possession, optimization of financial flows, management expense decrease, opportunity to transfer losses within the group, asset protection from creditor claims.
 
In December 2011 the government of Latvia approved amendments in the Law on Enterprise Income Tax, which prescribe application of significant tax rebates to the holding companies established in Latvia.
 
As of 01.01.2013 clause 1 of section 3, paragraph 4 is removed (clause 100 of the transitional provisions of the Law on Enterprise Income Tax). Subsidiary undertakings, upon paying dividends to their parent non-resident companies, will be relieved from the obligation to withhold enterprise income tax in Latvia.
This will not apply to the companies from the “black list” registered in the tax haven countries. For such companies the tax will be charged at the rate of 15% starting 01.01.2013. It doesn’t appear from the law currently, but the proposed amendments to the Law on Enterprise Income Tax are planned to add the words “and dividends” to clause 3 of section 8.
 
Currently dividend income paid to non-residents is taxed at the rate of 10%. Exclusion applies to EU and EEA undertakings if they provide a certificate from the revenue service of their country of residence stating that they comply to paragraph 19, section 1 of the Law on Enterprise Income Tax (i.e. that it pays similar tax in its home-country).
 
Moreover, as of 01.01.2013 the procedure for taxation of dividends received from other countries is also amended (section 11 of the Law) (clause 104 of the transitional provisions of the law on Enterprise Income Tax). According to the amendment the residents of Latvia – legal persons which receive dividends from their subsidiary and other non-resident companies will be relieved from paying tax in respect of the received dividends. Exclusion applies to dividends received from “black list” undertakings, which are registered in low tax countries. Those dividends, as previously, will be included into income of its Latvian receiver taxable at the rate of 15%. Currently, the dividends shall be included into the taxable income of Latvian taxpayer, if received from:
1)      foreign undertakings of the “black list”;
2)      Latvian undertakings, which are exempted from income tax in Latvia;
3)      undertakings which are not EU or EEA residents and the receiver’s interest therein is less than 25%.
 
As of July 1st, 2013, Section 3, Paragraph 4, Clause 3 will be removed from the Law on Enterprise Income Tax (clause 46 and 101 of transitional provisions of the Law), which earlier imposed obligation to pay enterprise income tax from interest payments if the recipient thereof (non-resident of Latvia) is located in EU or EEA and the payer (Latvian resident) is deemed to be an affiliated company.
 
Meanwhile, payments to non-affiliated companies are not subject to taxation, payments to affiliated persons are taxable at the rate of 10%, payments to affiliated persons from EU shall be taxed at the rate of 5%, in respect of the countries with whom tax treaty is entered into – 5%, tax haven companies - 15%. As of 01.07.2013. tax exemption will also apply to payments related to intellectual property, which are made by the Latvian company upon paying income to the affiliated company from EU. Section 3, Paragraph 4, Clause 4 will be removed from the Law (clause 47 and 101 of transitional provisions of the Law on Enterprise Income Tax).
 
Currently, tax rate in respect of payments for literary or artistic works is 15% (except for EU countries), for other types of intellectual property – 5%, in respect of tax treaty countries – 5%, tax haven companies – 15%.

As of 2014 the regulation relating to cancellation of tax imposition on interest payments and payments for intellectual property will also apply to payments to all non-resident undertakings both from EU and third countries (e.g. Russia). Exemption will apply to tax haven countries. For them the income tax rate will be 15%.
 
Zhanna Fedosenko, INLAT PLUS tax consultant