The black list of offshore jurisdictions updated in Latvia

10.10.2012 In Latvia the black list of offshore jurisdictions was updated that includes 68 countries among which the Netherlands Antilles, Bahamas, Belize, Panama and Seychelles are named. It should be highlighted that this list was firstly adopted in 2001 and approved by regulations of the Cabinet of Ministers of the Latvian Republic № 276 dated 26 June 2001 “On countries and territories with low taxes and without taxes”.

The main idea of this list is that the legislator of Latvia doesn’t spread tax preferences over income paid and received from companies incorporated in these jurisdictions.

On the basis: http://www.likumi.lv/doc.php?id=25839

Expert’s opinion

The similar legislative acts have been adopted by all jurisdictions striving to cooperate with the OECD (Organization for Economic Co-operation and Development) and FATF (Financial Action Task Force). Latvia is not the exception. Nevertheless, I would like to draw Your attention to the fact that this list is actual for the residents of Latvia.

In accordance with the Law “On income tax of enterprises” the tax at rate 15% is levied from all payments made by the residents of Latvia to persons situated or incorporated in offshore areas.

The same scheme functions in accordance with the Law “On income tax of population”: 25% tax is levied from all payments of individuals – the residents of Latvia – to persons that are situated or incorporated in offshore zones. But for the Russian and the Ukrainian clients who have opened bank accounts in Latvia there is no cause to worry.

Yaroslav Lomakin ( Managing Partner of Honest & Bright Company Ltd)