On Tuesday, the 27th of June, Latvia’s government decided to adopt a new list of low-tax or no-tax countries and territories, expanding it with the British Virgin Islands, Costa Rica, the Marshall Islands and Russia.
The approved list will come into force on Saturday, the 1st of July.
The Ministry of Finance invites taxpayers to pay special attention to transactions with persons located or founded in the British Virgin Islands, Costa Rica, the Marshall Islands and Russia.
Now the Ministry of Finance will be required to report about the updated low-tax and no-tax countries and territories, as well as send it to the Latvian Herald and publish it on the ministry’s official website, as decided by the government.
The ministry will announce the new updated list after it has been approved and published in the Official Journal of the European Union.
This was decided in order to prevent the frequent technical amending of Cabinet of Ministers requirements in regards to low-tax or no-tax countries and territories, as well as to ensure the most effective and resource-friendly approach in this area, as well as timely reacting to various changes to lists composed by the EU.
Until now the EU list included twelve jurisdictions –
Anguilla Territory, US Guam Territory, US Samoa Territory, US Virgin Islands Territory, Bahamas, Fiji, Palau, Panama, Samoa, Turks and Caicos Islands Territory, Trinidad and Tobago, Vanuatu.
Although the last time amendments were added to the Cabinet of Ministers requirements were performed on the 22nd of December of 2022, the time has come to add amendments again in order to ensure its compliance with the EU’s updated list, adding to it new territories – territory of the British Virgin Islands, Costa Rica, Marshall Islands and Russia.
The planned amendments do not change the purpose and essence of the Cabinet of Ministers regulations, which already provide for the EU list to be taken over and regularly updated in order to prevent the possibility of abuse of the tax system. The relevant national tax base protection norms (protective measures) included in tax laws and regulations are also activated.
Latvian laws and regulations in the field of direct taxation establish a special tax payment regime (protective measures) in cases when transactions with persons located, established or established in low-tax or duty-free countries and territories are carried out.
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