IBC (Insolvency and Bankruptcy Code 2016)-IOD - PPT.pptx
Expatriate Tax planning in the Baltics
1. Expatriate Tax Planning in the BalticsExpatriate Tax Planning in the Baltics
ITSG
European Conference
18/19 th May 2017
Sofia
Valters Gencs, TaxValters Gencs, Tax
attorneyattorney
3. Sofia, 18/19th May, 2017
“Baltic Taxes” available on the Apple App Store and the Android Market
Baltic Taxes is a tax planning and optimization application which
helps the user to calculate the VAT, corporate and personal income
taxes in the Baltic States (Latvia, Lithuania and Estonia). You can find
all tax rates as well!
Now available for Android and IOS!
Baltic Taxes
7. Detection of offshore accounts
Offshore
company
Latvian
credit card
1 use in
Sweden
Inquiry to Latvia
from Sweden
Banks obligation to disclose
• Taxpayers does not file declarations
Loan agreement
justification
Sofia, 18/19th May, 2017
8. Suspect transactions
Cash 60000 EUR (except salary, pension and social fee)
Cash 2000 EUR change of small nominal
15000 EUR lump-sum payments
Currency exchange more than 8000 EUR in cash
Transfers for 60000 EUR without opening account or taking
from account
Prohibition to execute cash transaction exceeding 7200 EUR (not applicable to
natural persons)
Cash declaration exceeding 1500 / 3000 EUR
Loans over 15000 EUR reported.
Sofia, 18/19th May, 2017
9. Lists of Low Tax Countries
In Latvia In Estonia In Lithuania
Alderney
Andorra
Anguilla
Antigua & Barbuda
Aruba
Bahamas
Bahrain
Barbados
Belize
British Virgin
Islands
Brunei
Cayman Islands
Cook Islands
Costa Rica
Curacao
Djibouti
Dominica
Ecuador
Grenada
Guam
Guatemala
Hong Kong
Isle of Man
Jamaica
Jordan
Kenya
Labuan
Lebanon
Liberia
Lichtenstein
Macau
Maldives
Marshall Islands
Mauritius
Monaco
Montserrat
Nauru
New Caledonia
Niue
Panama
Saint Helena
Saint Kitts &
Nevis
Saint Lucia
Saint Pierre &
Miquelon
Saint Vincent &
the Grenadines
Samoa
San Marino
Sao Tome and
Principe
Seychelles
Sint Maarten
Tahiti
Tonga
Turks and Caicos
Islands
Uruguay
Vanuatu
Venezuela
Virgin Islands
(USA)
Andorra
Anguilla
Antigua & Barbuda
Antilles
Aruba
Bahamas
Barbados
Belize
Bermuda
British Virgin
Islands
Brunei Darussalam
Cayman Islands
Chile
Commonwealth of
Dominica
Cooks Islands
Costa Rica
Djibouti
French Polynesia
Gibraltar
Grenada
Guam
Guatemala
Guernsey
Hong Kong
Jamaica
Kenya
Kuwait
Labuan
Lebanon
Liberia
Liechtenstein
Macao
Maldives
Mauritius
Monaco
Montserrat
Nauru
Netherlands
New Caledonia
Niue
Oman
Panama
Philippines
Puerto Rico
Qatar
Saint Kitts & Nevis
Saint Lucia
Saint Vincent &
the Grenadines
San Marino
Seychelles
The Marshall
Islands
Turks & Caicos
Islands
Uruguay
Vanuatu
Venezuela
Virgin Islands
(USA)
Andorra
Anguilla
Antigua & Barbuda
Aruba
Azores
Bahamas
Bahrain
Barbados
Belize
Bermuda
British Virgin Islands
Brunei Darussalam
Cayman Islands
Commonwealth of
Dominica
Cook Islands
Costa Rica
Djibouti
Ecuador
Gibraltar
Grenada
Guatemala
Guernsey, Sark,
Alderney
Hong Kong
Independent State
of Samoa
Isle of Man
Jamaica
Jersey
Kenya
Kuwait
Lebanon
Liberia
Liechtenstein
Macao
Madeira Islands
Maldives
Mauritius
Monaco
Montserrat
Nauru
Netherlands Antilles
New Caledonia
Niue
Panama
Saint Helena
Saint Kitts & Nevis
Saint Pierre &
Miquelon
Saint Vincent & the
Grenadines
San Marino
Seychelles
Tahiti Island
The Marshall Islands
Tonga
Turks & Caicos
Islands
United Arab
Emirates
Uruguay
Vanuatu
Venezuela
Virgin Islands (USA)
Sofia, 18/19th May, 2017
10. Taxable income
Sofia, 18/19th May, 2017
Advances – over 90 days
If not employees in LLC, and income over 1800 EUR
Loans exceeding 5 years (amounts limited to 30% income
or equity-was 354m lats in 2011)
Lower interest rate – 30% allowed
Share option below 3 years – taxable
25% ownership of offshores
11. Social fee for immigration
purposes (third countries)
Gross salary should be per month at least:
1636 EUR – Board members
1227 EUR – High qualified specialists
818 EUR – Employees
380 EUR – Head of the representative office
1636 EUR – Self-employed persons
380 EUR – Spouse (family member)
228 EUR – Child (family member)
Sofia, 18/19th May, 2017
12. Capital Income Tax 10%
Sofia, 18/19th May, 2017
Deposits, account balance
Tax point- when is accesible
Foreign interest- declaration
Deposit before 1 Jan, 2010- taxable based on December 6, 2010
Constitutional Court decision- On cash bases
Capital Gains Tax- 15%
Personal Income Tax- 23%
Gifts- 23% from natural persons exceeding EUR 1425
13. Dividends - 10%
15% corporate
tax (LV)
10%
Total tax burden – 25%
Recipient
Sofia, 18/19th May, 2017
15. Sofia, 18/19th May, 2017
Micro Tax 15%
Includes Personal Income Tax, Corporate Income Tax and Social Tax up to 5
persons
Micro company tax – 12% from turnover up to 7000 EUR
For turnover from 7000,01 EUR till 100 000,00 EUR - tax rate is 15%
In case turnover exceeds 100 000 EUR, the excess is subject of 20 % tax
16. Consulting fees
Salary paid
from Swedish
company
Swedish
company
Expatriate
Latvian
company
Withholding
tax
VAT
Consulting fee
Sofia, 18/19th May, 2017
PE in
Latvia?
17. Residence Certificates
Certificates valid for 5 years
Date and number of contract
Confirmation from Latvia tax authorities required
(30 days answer)
WTH paid by payer if exemption is not obtained
Sofia, 18/19th May, 2017
19. Sale of real property
From 12.06.2007 –
until 31.12.2008.
From 01.01.2009 –
31.12.2009.
From 01.01.2010.
Income was tax
exempt if property
was owned more
than 60 month and
for more than 12
month this property
has been persons
residence place.
Income tax exempt if
property owned
more than 12 month
is sold
Income tax exempt if
property owned
more than 60
months and at least
12 months to sale
has been place of
residence. Tax rate
15% of difference
between sales price
and acquisition
costs.
Sofia, 18/19th May, 2017
20. A1 certificate
Sent for 24 month – pay in home country
Pay where work, regardless where is residence
Work in 2 states for 12 month – pay where is residence
No residence in working states – where company’s
legal address
Several employers – where is residence country
Sofia, 18/19th May, 2017