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Tax returns and compliance Tax rates Residence rules Termination of residence Economic employer approach Types of taxable compensation Tax-exempt income Expatriate concessions Salary earned from working abroad Taxation of investment income and capital gains Additional capital gains tax (CGT) issues and exceptions General deductions from income Tax reimbursement methods Calculation of estimates/pre-payments/withholding Relief for foreign taxes General tax credits Sample tax calculation When are tax returns due? Annual income return has to be filed between 1 March and 1 June of the following taxation year. At the year-end tax for other types of income is calculated and paid.
However, there are some local rules similar to the economic employer approach. Employment income is subject to Latvian tax to the extent it was earned during a period of Latvian residence or, in the case of income earned while non-resident, to the extent it was earned in respect of duties performed in Latvia (subject to treaty relief).Worldwide income includes Latvian and foreign employment income and personal income, such as income from investments, rent, capital gains, business activity, non-taxable income and other types of income.Annual tax returns have to be filed only to report the income about which the Tax Authority does not have information about in its databases – generally about income for which income tax is not payable by the income payer, for instance, about non-taxable income for the sale of personal property, foreign income etc.Is salary earned from working abroad taxed in Latvia? The taxation of salary earned from working abroad depends on an individual’s residency status and source of income.As a rule, worldwide income of Latvian residents is taxable in Latvia.No, however, immigration and taxation authorities have some shared databases which means that if some information is registered in the database of the Office of Citizenship and Migration, for instance, about receipt of a residency permit, the Tax Authority can see it.
Will an assignee have a filing requirement in the host country after he leaves the country and repatriates? Generally the income received for the work performed in Latvia, but paid by the foreign employer to the assignee after leaving Latvia and filing the departure tax return, would be taxable in Latvia and a tax return would have to be filed.
What are the compliance requirements for tax returns in Latvia?
Latvian residents are required to report their worldwide income in Latvia.
An individual is considered a Latvian resident from the first day of arrival in Latvia after he/she has spent more than 183 days in Latvia in any 12-month period, so visits after assignment may extend residency.
In order to determine the 183-day period, the OECD Presence test is used when the days of arrival and departure, weekends, vacations spent in Latvia etc. An exception is the case when the individual cannot leave the country due to own illness.
Is there, a de minimus number of days rule when it comes to residency start and end dates?