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NEW CIT CONCEPT in Latvia from 01.01.2018.
The CIT is payable at the moment of profit distribution (including deemed profit distribution). In case of reinvestment of profit CIT shall not be applied. The applicable CIT rate is increased from the current 15% to 20%( from net amount).
Non-business expenses will be treated as profit distribution, e.g. representation costs, penalties, non-business costs for which CIT will be payable on a monthly basis, but for transfer pricing differences or thin cap CIT will be payable on annual basis.
Following the tax reform several tax reliefs will be abolished, including depreciation for tax purposes, extra tax allowances for new equipment, support for research and development costs, as well tax relief for large investments.