Latvia confirms revised low-tax list from 1 November

Eight jurisdictions remain on the list

The State Revenue Service’s 3 November tax-law overview confirms the Finance Ministry list published in Latvijas Vēstnesis on 20 October. From 1 November, the list comprises Anguilla, Guam, American Samoa, the US Virgin Islands, Russia, Palau, the Turks and Caicos Islands, and Vanuatu. Panama and Vietnam no longer appear. Cabinet Regulation No. 333 links the Latvian list to Annex I of the EU list of non-cooperative jurisdictions and provides that an update applies from the first day of the month after official publication.^[1][2][3]

Review outbound payments and withholding

Section 5(6) of Latvia’s Corporate Income Tax Law generally requires Latvian residents and Latvian permanent establishments to withhold corporate income tax at 20% from payments and dividends to persons located, established or incorporated in listed jurisdictions. The provision includes payments through representatives, third-party bank accounts and set-off arrangements, while stating exceptions for qualifying goods and EU or EEA publicly traded securities acquired at market value. Section 5(8) separately specifies 20% withholding on interest and intellectual-property payments. Any exception or State Revenue Service permission must be checked against the current law and transaction facts.^[4]

Related-party and dividend treatment also matter

The list is relevant beyond payment withholding. Section 4(10) treats a transaction with a person in a listed jurisdiction as a related-party transaction for the specified deemed-distribution calculation. Section 6(1) generally permits a taxable-base reduction for qualifying dividends received from a taxed company, or where tax was withheld at source, but excludes dividends received from a person in a listed jurisdiction. Removing Panama and Vietnam therefore changes the list-based screen from 1 November; it does not by itself establish the final Latvian tax treatment of a payment, transaction or dividend.^[4]

Practical action

Latvian groups should update counterparty master data and review payments and dividend receipts from 1 November, prioritising interest, royalties, dividends and other transfers involving the eight retained jurisdictions or the two removed jurisdictions. They should document the recipient, payment date, payment type, market-value evidence and any statutory exception or permission. The official materials do not introduce a new return or filing deadline, and no specific transition rule was identified for amounts accrued, credited or set off around the changeover.^[1][2][3][4]