7.01.2022. Latvia, taxation changes 2022

Company News

Personal Income Tax (IIN)
1) A non-taxable minimum of 350 EUR per month, from 01.07.22. to 500 EUR per month.
2) The following shall be exempted from taxation:
– in addition to catering costs covered by the employer, medical treatment costs covered by the employer up to 480 EUR per year (average 40 EUR per month) within the existing limit;
– the costs related to the performance of the remote work of the worker covered by the employer if their total amount per month for full-time work does not exceed 30 EUR;
– if real estate is disposed of, consisting of agricultural land and buildings.
– support or co-financing for certain measures related to environmental policy.
3) Until 31.12.22 the IIN treatment for beneficiaries of royalty income, i.e. the beneficiaries of royalties to which the royalty is paid by an income paying agent other than a collective management organisation have the right not to register as performers of economic activity but taxes will be paid for them by the payer of income:
for turnover up to 25 000 EUR – IIN 25%,
for a turnover exceeding 25 000 EUR – IIN 40%.
Withholding IIN breaks down: VSAOI – 80% and IIN – 20%.

 Value added tax
1) reduced to 5% for the supply of publications or publications of books, periodical publications and other mass media in the form of printed publications and electronic publications, including online or downloading, as well as for the subscription thereof;
2) the application of VAT to the fee for reusable packaging of a beverage, deposit fee has been specified. The fee for the beverage reusable packaging will not be included in the taxable value of the sales item. The regulation of the VAT tax law is not applicable to the deposit fee.

 Excise tax
01.01.22. increases the rates of excise duty: cigarettes, substitute tobacco products, non-alcoholic beverages with sugar exceeding 8 g/100 ml.
01.07.22. reduce the rates of excise duty on wine, fermented beverages and intermediate products:

 Accounting field
Amendments to the Law on Annual Reports and Consolidated Annual Reports.
On 01.01.22, the Accounting Law will enter into force instead of the Law “On Accounting”.
New regulations of the Cabinet of Ministers:
“The procedures by which the accounting shall be assessed and the financial statements shall indicate the assets and liabilities of the undertaking if the business of the undertaking or its department is terminated”,
“Rules on the annual accounts of political organisations (parties) and their associations”,
“On the Requirements for the Cash Receipts and Cash Expenditure Support Documents and for the Maintenance of the Cash Book”,
In the process, there are new Cabinet of Ministers “Rules for Accounting Sort and Organizational,”
“Rules on annual accounts of associations, foundations and trade unions,”
“Rules on the annual accounts of religious organizations,”
“Regulations regarding the financial statements of individual economic operators”,
“Procedures by which individual economic operators, individual undertakings, farmers and fishing holdings, other natural persons carrying out economic activities shall keep accounts in a simple recording system”.

Translated from LV using CAT