Liechtenstein Expands Double Taxation Agreement Network: Liechtenstein and Latvia Sign DTA
The agreement regulates the elimination of double taxation in cross-border situations. It is based on the OECD international standard and takes into account the results of the OECD/G20 Base Erosion and Profit Shifting (BEPS) project aimed at preventing tax avoidance and tax evasion in a cross-border context. At the same time, the treaty practices of both Liechtenstein and Latvia have been considered.
The exchange of information is based on the international standard, while the automatic exchange of information will continue to be carried out under the AEOI agreement between Liechtenstein and the EU. The agreement also includes provisions on administrative assistance in the enforcement of tax claims.
To promote cross-border investments, the DTA with Latvia does not provide for withholding tax on dividends, interest and royalties between legal entities. In addition, the DTA reduces the withholding tax to 10% (for dividends and interest) and 5% (for royalties). The DTA also regulates the treatment of asset structures, pension funds and charitable organizations under treaty law. In addition, transfer pricing issues can be discussed in an institutionalized framework with the partner state and legal certainty is increased, for example, by the possibility of mutual agreement procedures.
The agreement is another important step towards expanding Liechtenstein's DTA network. It increases legal certainty for investments and strengthens economic and political cooperation between Liechtenstein and Latvia.
Click here for the government press release.
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