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Latvia will have the lowest tax regime in EU

The German periodicals Der Spiegel named Latvia the EU’s Newest Tax Haven.

Corporate Income Tax rate in Latvia is 15%, which is the third lowest in EU after Bulgaria with 10% and Cyprus with 12,5%.

The new holding regime introduced from January 1st 2013 is named the most liberal in Europe. Starting from 2014 withholding tax of 0% will be applied to royalties and interest paid to foreign entities.

The above support Minister’s of Finance Andris Vilks idea to turn Latvia into most tax efficient country in EU.

The critical attitude of the old-fashioned Der Spiegel caused resentful response in Latvia’s media.

Such evaluation of Der Spiegel looks odd against the background of the recent rating upgrade of the Fitch Ratings from BBB to BBB+ sating that „the outlooks are stable”.

Cut down on taxes must only add financial stability to Latvia’s economy. This is the instrument as well used by long-time EU members such as UK and Ireland.

Latvia’s entering the euro-zone is a definite plus for the foreign investors.

Der Spiegel as well emphasized Latvia’s strong ties with Russia stating that each 7th flight from Riga’s airport flies to Moscow and the majority of people fluently speak Russian language.

Summing up – Latvia was always attractive for the foreign investors. By introducing lower tax regime and entering the euro-zone Latvia will invite even more investors from Russia and Western Europe.

Read this article in our blog ibcconsultingblog

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