Remi Troch: Tax changes of fiscal policy in Latvia.Comparison of tax rates in the Baltic States
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Transcript of Remi Troch: Tax changes of fiscal policy in Latvia.Comparison of tax rates in the Baltic States
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Tax changes of fiscal policy in Latvia.
Comparison of tax rates in the Baltic States.
Remi Troch
Director International Tax
17 January, 2013
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Taxes the tool of fiscal policy
Corporate income tax in the Baltic States
Standard rate Reduced rate Loss carry forward
Latvia 15% 9% for micro companies Unlimited
Lithuania 15%
5%
Small and medium
companies
(also applicable to enterprises if
more than 50% of the annual
turnover is derived from
agricultural business)
Unlimited
Estonia 21/79 (26,6%) - N/A
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Taxes the tool of fiscal policy
Value added tax in the Baltic States
Standard rate Reduced rate
Latvia 21%
12%
medication, medical equipment, books, hotels,
Electricity 21%
Lithuania 21%9%
5% - medicinal products
Estonia 20%9%
books, media, hotel services, medication, medical
equipment, etc.
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Taxes the tool of fiscal policy
Payroll tax in the Baltic States Personal Income Tax
Employee Employer Personal income tax
Latvia 11% 24.09% 24% as of 2013
Lithuania 9% 30.98% - 32,6%15% /5% (for manual self
employed activities)
Estonia 2.8% (+2% pensionfund)
33% 21%
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Taxes the tool of fiscal policy
Payroll taxes in the Baltic States
PIT rateSoc sec
employeeTax exempt
Soc seccontribution
PITNet salary
Latvia 2012 25% 11% 768 1 100 2 214 6 686
Latvia 2013 24% 11% 768 1 100 2 125 6 775
Lithuania 15% 9% 194 900 1 336 7 764
Estonia 21%2.8% +
(1-2% funded
pension
payment)
1 728280 +
(100-200)1657 - 1 636 7 963 - 7884
A comparison of payroll tax and salary in 2013 (gross to net)
Gross salary: 10.000 per year
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Taxes the tool of fiscal policy
Personal income tax on capital in the Baltic States
Standardrate
DividendsInterestincome
Payments from privatepension funds
Life insurance
Latvia 24% 10% 10% 10% 10%
Lithuania 15% 20% 0%* / 15%
15% / 0% if contract with
the pension fund of at least5 years; payout takes place
at least after 5 years when
the recipient is at
retirement age )
15% / 0% (if certainconditions are met)
Estonia 21% 0% 0%** / 21%21%/ 10% (from pensionfunds registered in EU or
EFTA country )
21%
*- income from securities, deposits, loans to be repaid not earlier than after 366 days .
** - interest received from a credit institution established in the EU or an EFTA country or from a permanentestablishment of a foreign credit institution registered in the EU or an EFTA country .
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Taxes the tool of fiscal policy
Inheritance and Gift Taxes in the Baltic States
Inheritance Gift
LatviaThere is no separate inheritance and gift tax, but gifts are sometimes included in the resident
recipients taxable income.
Lithuania
The taxable base of resident beneficiaries includes all
kinds of inherited property, irrespective of whether their
source is in Lithuania or abroad.
The tax rate is 5% for inherited property up to EUR 145 000
If the value exceeds EUR 145 000, the whole amount is
subject to a 10% tax.
Gifts from a spouse, child, parent,
grandparent or grandchildren exempt
from taxes.
Gifts received from any individual is
exempt if they do not exceed EUR 2 300
per year.
EstoniaThere are no inheritance or gift taxes. Inheritances and gifts are usually not subject to income tax.
The gains from the transfer of property received as a gift or inheritance, however, are subject to
income tax.
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Taxes the tool of fiscal policy
Real estate taxes in the Baltic States
Object Tax rate
Latvia
Land, buildings and engineeringstructures used for businesspurposes
1.5% of the cadastral value but at least 5 LVL perobject
Uncultivated agricultural land 3% of the cadastral value but at least LVL 5 per object
Lithuania
Land 1.5% of the land value as determined by thegovernment
Buildings used for businesspurposes
0.3%-1% of the market value (determined by therespective municipality). Municipality may reduce the
rate or even exempt.
Estonia Land
0.1%-2.5% ofthe market value determined by therespective municipality. For land to which a limitation
of economic activity applies, the government may
reduce the rate by 25%, 50% or 75%.
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Taxes the tool of fiscal policy
Real estate: budget revenue from transfer and real estate tax
Revenue Million of localcurrency
Percentage of total governmentrevenue
Latvia 84,114 1,76%
Lithuania 332 0,97%
Estonia 755 0,93%
Belgium 7,3 4,78%
Austria 1,24 1,02%
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Questions
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Remi Troch
Director International Tax
BDO Tax
Alberta street 1-2, Riga, LV-1010
Phone: (+371) 67222237Fax: (+371) 67222236
E-mail: [email protected]
CONTACTS
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mailto:[email protected]:[email protected]
