Cultural objects are of particular importance – they reflect the state culture and identity and sometimes have not only cultural, but also high material value.
Archaeological finds, antiquities, elements of immovable cultural monuments, historical relics, artworks, manuscripts, rare printed works, film documents, photographic documents, video documents, and sound recordings are considered cultural objects in Latvia.
To prevent possible fraud, the movement of cultural objects across the external borders of the European Union is strictly regulated, and the cultural objects themselves must be reflected in the customs declaration.
Import of cultural objects into Latvia
Cultural objects that are imported into Latvia from the territory of an EU country and for which there are documents confirming ownership or permission to export from an EU country do not need customs clearance and the provisions of the regulations No. 846 on the export of cultural objects from the territory of Latvia of the Cabinet of Ministers of the Republic of Latvia are not applied to them.
Cultural objects imported into Latvia from the territory of third countries must go through customs clearance procedures.
If cultural objects were imported from the territory of third countries and did not go through customs procedures, then, firstly, for the import into the territory of Latvia of values subject to customs clearance, with the concealment of these values from customs control or for non-declaration, an administrative fine with confiscation of these values may be imposed, and if the cost of undeclared values is equal to or exceeds ten minimum wages, then one can be brought to criminal responsibility.
In addition, when such values are exported from Latvia, the provisions of the regulations No. 846 on the export of cultural objects from the territory of Latvia of the Cabinet of Ministers of the Republic of Latvia are subject thereof.
To prevent the import and storage of cultural objects illegally exported from third countries in the territory of Latvia, the provisions of the Council and Parliament Regulation (EU) No. 2019/880 on the import of cultural objects are applied. According to the provisions of the said regulation:
- for cultural objects over 250 years old, you must present an import permit (license);
- for cultural objects over 200 years old worth 18,000 euros and more – you must present an importer statement.
Duties and taxes
When entering Latvia from a country that is not a member of the European Union, it is allowed to import things in personal luggage for personal use, own consumption or gifts without paying taxes, if their total cost per entry does not exceed:
300 euros – if the traveller enters by land;
430 euros – if the traveller enters by air or sea transport.
The total cost does not include:
- the cost of personal baggage imported by the traveller for a while (temporary import) or brought back after temporary export;
- the cost of drugs required for personal use;
- tobacco and alcoholic products subject to certain restrictions.
Thus, cultural objects are included in the total cost of things for personal use, own consumption.
The type and number of objects must be such that they do not indicate importation for commercial purposes (for example, no more than three pieces of the same type).
If the value of the luggage you bring in exceeds the aforementioned amounts, you must draw up a declaration and pay value added tax on the value of your luggage. The import customs duty is 0%.
There is also a customs procedure for temporary importation.
Temporary import – the import of cultural objects into Latvia from third countries for a period not exceeding 2 years (24 months) and their return back in full amount.
According to EU Regulation 2015/2446 and EU Regulation No. 952/2013, a different tax regime can be applied for temporary import:
- without paying tax,
- with partial payment of tax,
- simplified or ordinary procedure.
The simplified regime is applied for electronic declaration if there is a full tax exemption. In any case, you must obtain a permit for temporary importation from the customs office.
When applying the procedure for temporary importation with partial tax payment, the tax is calculated at the rate of 3% of the calculated VAT amount for one month.
Example: the value of cultural objects is 10,000 euros and they are imported for 6 months.
Tax calculation: 10,000 x 21% x 3% x 6 (months) = 378 euros.
When exporting cultural objects back, you can request a tax refund by filling out a special application form. It should be borne in mind that a person requesting a tax refund must meet one of the following criteria:
- business activity outside the EU is registered,
- corresponds to the status of a taxpayer outside the EU territory,
- was not registered in the Latvian VAT Payers Register,
- did not carry out taxable transactions in the territory of Latvia (i.e. did not execute transactions in the amount exceeding 40,000 euros),
- did not carry out economic activities in Latvia registered in accordance with regulatory enactments.
Export of cultural objects from Latvia
There are procedures for permanent and temporary export from Latvia.
Temporary export – the export of cultural objects from Latvia for a period not exceeding 3 years (36 months) and their return back in full amount and in good condition within the time period specified by the competent institution (in Latvia – the Inspection for the Protection of Cultural Monuments).
Permanent or temporary export of cultural objects from Latvia requires a permit in the following cases:
- a cultural object older than 50 years and related to the cultural history of Latvia – they were produced by certain persons and enterprises registered in the Inspection for the Protection of Cultural Monuments, and they do not belong to their authors and manufacturers;
- a cultural object over 100 years old, regardless of the country of origin.
An export permit is not required if the cultural object was imported from an EU Member State and there are documents proving ownership.
According to Council Regulation (EU) No. 116/2009 on the export of cultural objects, the export of certain cultural objects outside the EU requires the permit of the competent authority.
In Latvia, it is the Inspection for the Protection of Cultural Monuments. The categories of cultural objects for the export of which this permit is required are determined by this regulation (No. 116/2009). For instance:
- illustrations and paintings, completely created by hand in any technique and from any material, over 50 years old and not belonging to their authors, costing from 150,000 euros and more;
- works in the technique of watercolour, gouache and pastel, created by hand from any material, over 50 years old and not belonging to their authors, costing from 30,000 euros and more;
- mosaics from any material and drawings in any technique, created by hand from any material, over 50 years old and not belonging to their authors, costing from 15,000 euros and more;
- originals of engravings, prints, serographies and lithographs, as well as their corresponding plates, costing 15,000 thousand and more, originals of posters, over 50 years old and not belonging to their authors.
The cost of a cultural object is determined at the time of filing an application for export.
Sale of cultural objects in Latvia
If a physical person decides to sell his or her (personal) cultural objects in the territory of Latvia, the following circumstances must be taken into account.
According to the Law of the Republic of Latvia on Personal Income Tax, the sale of personal movable property (movable property belonging to a physical person) is not subject to personal income tax, except for income from the sale of things manufactured or purchased for sale and capital gains income.
If the amount of a transaction or several transactions per year is or exceeds 10,000 euros, the seller is obliged to declare the transaction (or transactions) and provide evidence that the object of sale was the property of the seller.
The sale of more than three cultural objects can be regarded as an economic activity of a physical person.
According to the Law of the Republic of Latvia on Personal Income Tax, the economic activity of a physical person is any activity aimed at the production of goods, performance of work, trade and provision of services for remuneration. A physical person’s activity is classified as an economic activity if it meets one of the following criteria:
- regularity and consistency of transactions (three or more transactions during the taxation period or five or more transactions during three taxation periods);
- the income from the transaction exceeds 14,229 euros in the taxation year, except income from the alienation of personal property;
- the economic essence of the activity or the amount of things owned by a person indicates a systematic activity in order to obtain remuneration.
In this case, a physical person is obliged to register an economic activity with the Latvian State Revenue Service and pay tax on the difference between the costs of purchasing, transportation, customs procedures and income from the sale of a cultural object.
In any case, before importing and selling the specified type of goods, it is better to consult a lawyer, since each case has its own nuances and differences.
Law Office Inlatplus, having extensive experience, at any time can provide qualified legal assistance on all issues our clients are interested in.
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