Individual Income Tax
The current rate of 23% will be increased to 26% and that rate will be applied also for for self-employed persons of 15%.
Capital gains (from the sale of shares and immovable property etc.) will be taxed at a rate of 15%, and investment income (such as dividends, deposit interest) will be taxed at 10%;
Tax will become payable on the private use of a company car. The rate depends on the type of car;
The maximum deduction for medical and educational expenses is reduced from LVL 300 to LVL 150.
Company Income Tax
It will be possible to reduce taxable income by only 40% of representative expenses;
Expenses which are not directly business related and expenses incurred for maintaining social infrastructure objects will be subject to a coefficient of 1.5 before taxable income is adjusted (increased) by the said amounts;
In cases when advance tax payments are reduced based on a taxpayers request, if the difference between the actually calculated tax for the period and advance payments exceed 20%, late fees will be charged on the difference that exceeds the 20%.
05.03.2009. new Regulations No.149 of the Cabinet of Ministers of February 17, 2009 "Regulations on the annual declaration of personal income and on order of its filling" stayed in force. New Regulations generally are similar to
Regulations No.41 of the Cabinet of Ministers of January 10, 2006 "Regulations on the annual declaration of personal income and on order of its filling".
31st January 2008 Saeima adopted the Law on farms and fisheries aimed at providing farmers and fishermen holding status, the establishment and a basic legal framework of farms and fisheries. Consequently, from January 1st 2012 the Enterprise register is not recorded new sole proprietor companies, farms or fisheries, but till June 30th 2013 existent companies have to choose one of three options: 1) register as a commercial company into the Commercial Register; 2) the owner can be entered into the Commercial Register as a natural person (individual merchant); 3) to initiate the liquidation process. "Innovator" Ltd. could give the tax and legal advices to choose the most effective solution for further actions.