News: Dividends will not be taxable income in Latvia

Starting of 1st January 2013, the dividends are not taxable income if the company – Latvian resident pay out dividends to the non-resident unless it is located, established or founded in low tax or no-tax states or territories. Also, dividends received from the non-resident are not taxable unless it is located, established or founded in low tax or no-tax states or territories.

The mentioned privilege is not applicable on low tax or no-tax states or territories which are listed in the Ministry Regulations No.276, adopted on 26.06.2001. So called 'tax havens' are the following: Andorra, United Kingdom, British Virgin islands, United Arab Emirates, Belize, Bahamas, Dominica, Gibraltar, Hong Kong, Cook islands, Liechtenstein, Mauritius, Monaco, Panama, Seychelles, etc.

Dividends that are paid from Latvian company to the offshore company such as mentioned above shall be taxable by increased rate 15%.

The amendments in the Corporate Income Law entered into force on January 1, 2012 and pursuant to the Transition provisions will be applicable starting of the next taxation period, namely, from January 1, 2013. Currently the dividends are taxable by 10%. See the entire version of Corporate Income Tax Law here: Latvian Law