LTV's De Facto on Bolt's €1.4 million tax penalties

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Bolt taxi-on-demand startup fined EUR 1.4m for unpaid corporate tax (UIN). Latvia has penalized the Estonian unicorn for tax evasion twice, Latvian TV reported September 11.

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Bolt entered Latvia in 2016. State Revenue Service problems started early. Better cooperation with tax collectors, yet a corporate tax battle remains.

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"Bolt Operations" registered the app in Latvia. Since 2016, the company has a permanent establishment in Latvia that must pay corporate tax.

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VID found Bolt in violation. According to the service's website, after the audit the agency owed EUR 922k in corporate income tax and under €500,000 in arrears and penalty.

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Latvian Television (LTV) states that Bolt has been fined almost EUR 200,000 for similar violations; legal processes will continue. The corporation has also appealed.

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Complex business issues can cost multinational firms millions in taxes paid or unpaid. "Yandex" fled Latvia without paying corporation tax, but VID doesn't sanction it.

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According to lawyer Jnis Taukas, if a foreign firm wants to make money in Latvia but not pay corporate income tax, it should not open an office.

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Digital services have prompted a global examination of corporate tax rules, and considerable changes are expected in the coming years.

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OECD, EU, and other countries voted to create a single tax that would require digital platforms to pay tax in each country they earn, regardless of physical presence.

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Latvia's advantages will be several million euros, but not 10 million, according to the Finance Ministry.

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Second, corporations with above €750 million in revenue will pay a minimum 15% corporate tax rate. Latvia's corporate tax is paid only when dividends are removed, unlike other countries.

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If a large firm's Latvian subsidiary doesn't pay dividends for a long time, the parent company must pay the profit tax in its country.

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Latvia shouldn't lose reinvested income, says ucins. Tax expert Taukas recommends changing local law so Latvian businesses don't pay tax abroad.`

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