Special Economic Zones
There are four Special Economic Zones (SEZ) in Latvia – Riga Free Port, Ventspils Free Port, Liepaja Special Economic Zone and Rezekne Special Economic Zone that were established to promote entrepreneurial activities within the regions. All of them offer very favourable business incentives. Some of benefits for companies operating in Free Ports and SEZ include rebate on real estate tax, corporate income tax, withholding tax for dividends, management fees and payments for usage of intellectual property for non-residents and others.
Main benefits for companies operating in Free Ports and SEZ are as follows:
* The maximum accumulated amount compensated to the company by these conditions collectively is 35% (45% for medium and 55% for small enterprises) of the company’s total ongoing investment of up to 50 million Euros (see Section 8 in the excerpt below, On the Application of Taxes in Free Ports and Special Economic Zones, for further details).
Corporate income tax rebate for large-scale investment projects
Incentive for large-scale investment projects allows taxpayers to claim tax rebate for initial long-term investment in the following amounts:
Beneficial depreciation ratio for new technological equipment
Taxpayers may calculate tax depreciation from a higher initial value of fixed assets (new technological equipment bought in 2009-2013) and intangible investments (patents and trademarks registered after 1 January 2009) using a coefficient of 1.5 (150%).
Loss carry forward
As of 1st of January 2012, losses that have occurred before 2008 may be carried forward for up to 8 years for tax purposes. Losses that have occurred after 2008 may be carried forward indefinitely. For taxpayers registered in Special Economic Zones or Specially Supported Territories, losses that have occurred before 2005 may be carried forward for up to 10 years, and losses that have occurred since 2005 may be carried forward indefinitely.