This document discusses tax planning and rates in the Baltic states of Latvia, Lithuania, and Estonia. It provides information on personal income tax rates, corporate tax rates, VAT rates, taxation of dividends, capital gains tax, social security fees for immigration purposes, detection of offshore accounts, and tax considerations for real estate sales and retirement planning in the Baltic states. The document also describes a mobile tax application called Baltic Taxes that calculates taxes in the Baltic states.

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

2. Baltic States

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

4. Tax rates in Baltics

5. Dividend calculation

6. Salary taxation in Baltics
Sofia, 18/19th May, 2017

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

14. Dividend structure
Shareholder
worldwide
Latvian Holding
Company
Subsidiary
Not low tax country
No Latvian income tax on
dividends
Low tax countries :
15% WTH (low tax)
15% Royalty
30% Extraordinary dividends
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

18. 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

21. Retirement tax planning
 buypropertyinspain.eu
 buypropertyinbarcelona.eu
 buypropertyinmallorca.eu

22.  http://baltic-lawfirm.eu/

23. Sofia, 18/19th May, 2017