We are very pleased to be part of AmCham and are looking forward to driving innovation forward in Latvia.
Mikko Fernström, General Manager, Biogen Latvia
By Zinta Jansons, LAWIN
So the government decided to reduce the social insurance rate for employees by 1% to 34.09% of which the employee pays 10.5% and the employer 23.59%. In the grand scheme of things probably for most not a significant change.
At the same time as part of the 2014 budget package, the plan to reduce the personal income tax rate to 20% by 2016 has been sidetracked and a „revised" position proposed:
2014 - 24%
2015 - 23%
2016 - 22%.
To tighten the leash on taxpayers, proposed amendments to the personal income tax law broaden the scope of taxable income to include certain types of deemed income:
(Note: the deemed income from loans and interest does not apply to loans issued by licensed lenders - so don't worry about your mortgage and bank loans.)
The new regulation is quite detailed especially with respect to the loans deemed as income. Various criteria and exceptions are applicable. Assuming the proposals are enacted into law and come into effect for 2014, there will be two main issues to address - First, lenders and borrowers will have to make sure they document loans and follow the applicable criteria to avoid incurring additional tax liability and second, the tax authorities will need to be consistent in their approach in evaluating and enforcing the new regulation.
AmCham works hard to accomplish its goals and is a voice in the business community that is heard.
Filips Klavins, Managing Partner at Ellex Klavins