The Saeima of Latvia change a tax policy

The Latvian Saeima passed final laws on tax reform. As of 2016, there were 16 taxes and 103 state duties in the country.

We note a number of significant changes:

1. Companies reinvesting their profits are now exempt from taxation. Thus, if the Latvian organization did not accrue and did not pay dividends to its shareholders, then the profit tax should not be paid.

When paying dividends in favor of individuals or legal entities that are not residents of Latvia, the income tax will be withheld at a rate of 20%. In the same amount, the tax on payments to non-residents for other reasons will be withheld.

2. For companies operating under the tax regime - "microenterprise", a fixed tax rate is raised. As a result of the reform, it makes up 15% of the turnover (at present - 12%). At the same time, the maximum turnover threshold is reduced to 40 000 € (currently - 100 000 €).
The amendments come into force on January 1, 2018.