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Crypto assets have become an important financial instrument for both individuals and companies in recent years. More and more legal entities are purchasing, selling or using crypto assets in their business activities. However, with opportunities come responsibilities – especially in the field of accounting and tax accounting. In this article, we will look at the main issues on how companies in Latvia can correctly account for transactions with crypto assets. Should transactio

Cryptocurrencies like Bitcoin and Ethereum are becoming more common in business. Companies may accept crypto as payment, hold it as an investment, or trade it. But one question many business owners ask is simple: how should cryptocurrency appear in company accounts?   International accounting standards (IFRS) provide guidance on this. The key point is that cryptocurrencies are not treated like normal money in accounting.   Below is a simplified explanation of how businesses u

When companies purchase vehicles, the threshold for the value of a representative car is important - 75,000 euros excluding VAT. If the value of the vehicle exceeds this threshold, the company is not entitled to deduct VAT on the purchase and maintenance of the vehicle, and the costs related to the car cannot be attributed to business expenses. Therefore, in practice, the question often arises as to what expenses should be included in the purchase price of a vehicle in cases

As of 1 January 2026, a new requirement is in force in Latvia: structured e-invoice data must be submitted to the Valsts ieņēmumu dienests when a company issues e-invoices to public sector entities (B2G transactions). In practice, this means that an e-invoice is no longer just a document sent to the customer — its XML data must also be reported to the tax authority. E-invoices must be submitted in XML format, in accordance with the UBL 2.1 or PEPPOL BIS Billing 3.0 specificat

Several significant tax changes came into effect in 2026, affecting both employees and entrepreneurs. The main focus is on labor taxes, dividends, the alternative corporate income tax regime, as well as adjustments to VAT rates for certain sectors. In the field of labor, the minimum income not subject to personal income tax will increase to 550 euros per month, while the minimum wage will also increase from 740 to 780 euros. This means slightly higher net income for workers,

Following amendments to the Corporate Income Tax Law, an alternative dividend taxation regime has been introduced, which provides for a 15% corporate income tax (CIT) and an additional 6% personal income tax (PIT) on dividends. Previously, only a 20% CIT was applied to dividends. Comparing the two regimes, the total tax burden does not actually change. In the normal regime, the effective tax rate is 25% (calculated from the amount of the payout), while in the new regime it is

Foreign construction companies working in Latvia often ask: is it better to register a Latvian company (SIA) or operate through a permanent establishment (PE)? The correct choice depends mainly on project duration, reporting requirements, and transaction volume. VAT Registration for Construction in Latvia If you provide construction services in Latvia, VAT registration is mandatory in both cases: Construction services to a Latvian VAT-registered customer are usually invoiced

One of the most confusing aspects of the new e-invoicing requirements for accountants has been how these changes will affect delivery documents starting January 1, 2025. While structured e-invoice requirements don't directly apply to delivery documents, this doesn't mean you can skip creating a structured invoice when shipping goods. Understanding the Current Situation Many businesses currently use a combined document – a delivery note-invoice that merges multiple documents i

On December 11, 2024, Latvia's parliament approved significant amendments to the Personal Income Tax (PIT) Law that will take effect from January 1, 2025. Here's what you need to know about these important changes. New Tax Rate Structure The current three-tier progressive tax system will be simplified to two main rates: 25.5% for annual income up to €105,300 33% for income exceeding €105,300 An additional 3% tax will apply to total annual income exceeding €200,000 Capital Gai

In a significant move to harmonize VAT requirements for small and medium-sized enterprises (SMEs) across the European Union, Latvia is implementing new VAT registration rules starting January 1, 2025. These changes, stemming from Directive 2020/285, aim to create a more level playing field for businesses operating across the EU while maintaining support for smaller enterprises. Key Changes Coming in 2025 New Dual Threshold System The reform introduces a dual threshold system

Latvia's tax regulations include important provisions about "presumed income" (domājamais ienākums) for board members. Here's what business owners need to know for 2025. When Does Presumed Income Apply? Your company must handle presumed income taxation when two conditions are met: Your company has no employees or board members receiving at least the minimum monthly salary The company's monthly turnover exceeds threshold 5x the minimum monthly salary €3,700 (5x the minimum mon

Streamlining Your Accounting with Automatic Bank Feeds Managing your business finances can be time-consuming, but it doesn’t have to be. At our accounting services firm, we’re committed to making this process more efficient and accurate for our clients. One way we're doing this is by offering automatic bank feeds —a powerful feature that automatically imports your bank transactions into your accounting software. This is a significant step toward helping businesses stay on top

Starting in 2026, Latvia will introduce mandatory electronic invoicing (e-invoicing) for businesses, aiming to streamline financial processes and enhance transparency. As an accounting firm, we understand that changes like these can feel overwhelming for businesses of all sizes. However, we’re here to ensure that this transition is not only smooth but also beneficial to your business. What Does the New E-Invoicing Mandate Mean for Your Business? Mandatory e-invoicing means th

When it comes to business travel, understanding the nuances of per diems and work travel regulations is crucial for both employers and employees. In Latvia, these distinctions are governed by Cabinet Regulation No. 969, which outlines the specific requirements and allowances for different types of travel. Let’s delve into the key differences between business trip per diems and work travel, including the taxation of per diems. Business Trips Definition and Scope:  A business t

Efficient document submission is crucial for smooth accounting operations. At Confidentum, we’ve implemented several methods to make this process as seamless as possible. Here’s a comprehensive guide on how to submit your invoices and documents effectively. 1. Dedicated Email for Document Submission For submitting invoices and documents, use our dedicated email. This email is automated and documents sent here are automatically uploaded to our accounting system. 2. Project Man

In today’s fast-paced business environment, efficiency and accuracy are paramount. One of our standout offerings is our proprietary accounting system, designed to integrate seamlessly with your existing industry solutions. Whether your data resides in Excel, CSV, MySQL, other databases, or is accessible through API connections, we have the expertise to import this data directly into our system. For instance, if you use project management software to manage sales and supplier

Starting a business is an exciting journey, filled with opportunities and challenges. For many small businesses and freelancers, navigating the decision of whether to start a company or use invoicing services can be daunting. At our accounting firm, we often encounter individuals with minimal invoicing needs who are hesitant to incur the costs and complexities associated with establishing a company. If you find yourself in a similar position, this guide is for you.   When to

If you're handling intercompany transactions and the value doesn't exceed €250,000, you might be wondering what kind of documentation you need to prepare. The good news is that you are not required to prepare a full transfer pricing local file or master file. However, you still need to justify your pricing to the tax office in a clear and understandable way. Here’s a breakdown of what you need to do: Essential Documentation Requirements 1. Deal Description and Functional Anal

In the world of global business, navigating tax systems can often be complex and daunting. However, Latvia has emerged as a standout destination for entrepreneurs and corporations alike due to its streamlined and advantageous tax environment. From its attractive corporate tax rate to its efficient administrative processes, Latvia offers a compelling case for businesses looking to thrive in a conducive fiscal landscape. Why Latvia is Ideal for Business? Latvia offers exception

The importance of quality control in accounting services cannot be overstated. The integrity and accuracy of accounting practices are paramount. In this blog post, we'll explore how the principles of quality control, responsibility, and choosing reliable partners apply to accounting services and why they are crucial for building strong financial foundations. Quality Control: Ensuring Accuracy Every Step of the Way Just as in construction, where errors can lead to structural i