All form of relief relates to the income of an individual who is a Latvian resident.
The following amounts are subject to the definition and ceilings in Latvian law:
Latvia Business DeductionsIn Latvia, in addition to the deductions/credits mentioned above, deductions and business expenses may be claimed as specified below:
- Offset of losses: - A loss incurred from 2008 onwards may be offset forward indefinitely.
It is not possible to offset a loss from previous years.
- Consolidated statements - in Latvia consolidated returns are not allowed.
Yet, under certain terms a loss in one company of a group may be set against a profit in another company in the group.
- Financing expenses - interest on credit is allowable for tax.
Nevertheless, the interest is not deductible if the debt to equity ratio is more than 4:1.
- Employer's voluntary contributions to pension and health funds are allowable to an amount of LVL 40 per employee per month.
Latvia Depreciation of Fixed Assets
- The "double-declining balance" is the method of depreciation adopted in Latvia.
- The rates of depreciation in Latvia:
Class of Asset % Depreciation Buildings and equipment 10 Computers and peripheral equipment 70 Road infrastructure and transport vehicles 20 Vehicles and ships 30 Patents 20 (straight line method) Oil drilling equipment 15
- Research and development expenses may be deducted entirely in the year of purchase