IFRS 16 Leases to take effect from 1 January 2019 (1/46/17)

17.11.2017
Open article
On 9 November 2017 the European Commission approved IFRS 16 Leases for use in the EU. This standard will apply from 1 January 2019, however all lessees should start thinking about its implementation earlier because the changes it brings are crucial and may significantly alter the lessee’s balance sheet. Implementing IFRS 16 will not significantly affect the lessor’s accounting, i.e. both operating and finance leases and their accounting treatment will remain, with slight amendments to disclosure requirements, and so in this article we’ll be looking at the changes affecting lessees only. Read more..
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Anti-avoidance rules in new CIT Act (2/46/17) (0)

17.11.2017

Practice

Under the new CIT Act, an entity’s taxable income does not include dividends received from other entities and income arising on the sale of shares held for at least 36 months. In either case, however, this exemption is not available if the entity or its related party was formed or a particular transaction carried out for the main purpose of claiming any of the exemptions under the CIT Act or the PIT Act. Applying these rules is crucial in a structure that involves two or more entities. This article explores how the State Revenue Service (SRS) could evaluate such cases in the light of the Cabinet of Ministers’ new draft Regulation, and what criteria the OECD suggests for assessment internationally. Read more..

Tax havens (3/46/17) (0)

17.11.2017

Practice

To enforce the national legislation on direct taxation and to prevent abuse of the tax system, the Cabinet of Ministers’ Regulation No. 276, Tax Havens, was published on 26 June 2001. The list in its paragraph 1 names jurisdictions that are considered tax havens for the purposes of Latvian tax legislation. Read more..

VAT adjustments (2) (2/45/17) (0)

10.11.2017

Practice

Last week we wrote about adjusting VAT where a hire purchase (finance lease) agreement is terminated as a result of the goods (leased assets) being stolen (destroyed). This article explores how to adjust VAT in other cases, for example, where your output tax or deducted input tax needs adjusting because you have allowed or received a discount, returned or taken back an advance, written off an excess wastage, recovered a bad debt, or handled real estate. Read more..

Changes in accounting for deferred tax as at 31 December 2017 (3/45/17) (0)

10.11.2017

Practice

Latvia has adopted a new corporate income tax (CIT) system effective from 2018. The new CIT treatment and rates will significantly change the amount of deferred tax recognised on the balance sheet as at 31 December 2017. This article explores some of these changes. Read more..

VAT adjustments (2/44/17) (0)

03.11.2017

Practice

In the course of business, taxable persons sometimes need to adjust their output tax or any input tax they have deducted. For example, allowing a discount, returning an advance received, recovering a bad debt and terminating a hire purchase involve adjusting output tax, while receiving a discount, taking back an advance paid, selling used real estate and writing off any excess wastage involve adjusting any deducted input tax. This article explores adjustments that are caused by a number of reasons and governed by several provisions of the VAT Act. Read more..

 

 
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