Latvia Tax Agency Clarifies Corporate Income Tax Treatment of Personnel Sustainability Expenses

Latvia’s State Revenue Service recently clarified the corporate income tax treatment of expenses related to employee sustainability, specifically regarding provisions like coffee, tea, and snacks. The ruling, issued Jan. 6 as Ruling No. P005-17/8.7/79228, details the requirements for these expenses to qualify for tax exclusion.

Personnel Sustainability Expenses and Corporate Income Tax

The Tax Agency determined that for non-personalized expenses to be considered personnel sustainability expenses, they must be documented within a collective agreement. For these expenses, along with representation expenses, to be excluded from the corporate income tax base, the total amount cannot exceed 5 percent of total…