Company formation and accounting in Latvia
Last updated: 2018-02-24
The rules of the Cabinet of Ministers about low tax and no tax countries and territories (so called "black list").
In general, if Latvian company pays payments to low tax and no tax countries and territories, then Latvian company must withhold company income tax (20%) and pay it to the budget of the Republic of Latvia.

There is an exception from the above mentioned and Latvian company must not withhold company income tax from following payments:
  • Payment for goods if the goods purchased at market prices.
  • Payment for the securities of the European Union or the European Economic Area, if the securities are purchased at market prices.

Also must note, that Latvian company must not withhold company income tax in following cases:
  • if between Latvia and a below mentioned country is concluded and entered into force a convention for avoidance of double taxation and the prevention of tax evasion ("tax convention");
  • if a below mentioned country participates in he convention on mutual administrative assistance in tax matters. List of countries is available here.

Latvian tax authority may allow not to withhold the tax from certain payments, if a payer can prove that aim of the payments is other than not to pay taxes or to reduce the taxes that must be paid in Latvia.

But the permission not to withhold the tax from payments does not mean that the tax must not be withheld at all. From some of payments tax must be withheld on lower rate.

List of countries and territories, which in Latvia are considered tax-exempt or low tax countries and territories.
  • Antigua and Barbuda,
  • U.S. Virgin Islands,
  • The Commonwealth of the Bahamas,
  • Bahrain State,
  • Brunei Darussalam,
  • Dominican Commonwealth,
  • Republic of Djibouti,
  • The Republic of Ecuador,
  • Grenada,
  • Guam (USA),
  • Jamaica,
  • New Caledonia (French Republic),
  • The Hashemite Kingdom of Jordan,
  • The Republic of Kenya,
  • The Republic of Liberia,
  • Macau (China),
  • The Republic of Maldives,
  • The Democratic Republic of Sao Tome and Principe,
  • Saint Pierre and Miquelon (French Republic),
  • Saint Helena Island (United Kingdom of Great Britain and Northern Ireland),
  • Tahiti (French Polynesia),
  • The Kingdom of Tonga,
  • The Republic of Vanuatu,
  • Republic of Venezuela,
  • Zanzibar Island (United Republic of Tanzania).

History.

With rules, adopted in 7th November, 2017 (in force from 1st January, 2018) from the so called "black list" were excluded following countries / territories:
  • The Antilles Netherlands
  • United Arab Emirates ("tax convention" is concluded).
  • Aruba (Netherlands)
  • Barbados
  • Belize
  • Bermuda (United Kingdom of Great Britain and Northern Ireland)
  • British Virgin Islands
  • Jersey (United Kingdom of Great Britain and Northern Ireland)
  • Guernsey (United Kingdom of Great Britain and Northern Ireland)
  • Gibraltar (United Kingdom of Great Britain and Northern Ireland)
  • Republic of Guatemala
  • Hong Kong (China) ("tax convention" is concluded)
  • Cayman Islands (United Kingdom of Great Britain and Northern Ireland)
  • State of Qatar ("tax convention" is concluded)
  • The Republic of Costa Rica
  • Cook Islands (New Zealand)
  • Kuwait ("tax convention" is concluded)
  • Labuan (Malaysia)
  • Republic of Lebanon
  • The Principality of Liechtenstein
  • The Republic of Mauritius
  • Republic of Marshall Islands
  • Isle of Man (United Kingdom of Great Britain and Northern Ireland)
  • The Principality of Monaco
  • Montserrat (United Kingdom of Great Britain and Northern Ireland)
  • The Republic of Nauru
  • Niue (New Zealand)
  • Alderney (United Kingdom of Great Britain and Northern Ireland)
  • The Republic of Panama
  • Independent State of Samoa
  • San - Marino
  • The Republic of Seychelles
  • The Federation of Saint Kitts and Nevis
  • Saint Lucia
  • St. Vincent and the Grenadines
  • Turks and Caicos Islands (United Kingdom of Great Britain and Northern Ireland)
  • Eastern Republic of Uruguay.
  • Andorra
  • Anguilla (United Kingdom of Great Britain and Northern Ireland).



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