Latvia: The declaration of financial status of natural persons.

On December 15, 2011 entered into force the Law on Natural person financial status and undeclared income declaration.

Although financial status declarations shall have to be submitted from March 1, 2012 till June 1, 2012, in the declaration shall be indicated information regarding person’s financial status on December 31, 2011, 00:00 Latvian time.

The financial status declaration shall be submitted by a Latvian citizen, Latvian non-citizen or a foreigner (who has received a permanent residence permit or permanent residence card) and who at the same time is the resident of the Republic of Latvia.

The financial status declaration has to be submitted by a person who meets at least one of the following criteria:

1) The person owns or has joint ownership of the real estate or part of it abroad;

2) The person has acquired the real estate or a part of it in Latvia, and the total acquisition value exceeds 14`230 Euros;

3) The person owns or has joint ownership of the vehicle or aircraft abroad;

4) The person in Latvia possesses the shares (e.g. equity securities, equity shares, investment shares, capital shares) with a total acquisition value more than 14`230 Euros;

5) The person possesses abroad the shares;

6) The person possesses in Latvia debt securities (e.g. bonds), money market instruments, an investment fund units and other transferable securities, securities in which the rights to acquire or dispose the transferable securities are established. The total acquisition value of the financial instruments has to exceed 14`230 Euros;

7) The person possesses abroad debt securities (e.g. bonds), money market instruments, an investment fund units and other transferable securities, securities in which the rights to acquire or dispose the transferable securities are established;

8) The person's money (cash and non-cash) accruals in Latvia and abroad, or only in Latvia, or only abroad exceed 14`230 Euros;

9) The total amount of person’s private pension fund or life insurance in Latvia or abroad exceeds 14`230 Euros;

10) The person in Latvia or abroad has outstanding loans or other indebtedness with the total amount of more than14`230 Euros;

11) The person in Latvia or abroad has granted a loan and the unrecovered part of it exceeds 14`230 Euros;

12) The person owns the property in Latvia or abroad and the value of which exceeds 14`230 Euros;

13) The person is the beneficial owner within the meaning of the Law on Money Laundering and Prevention of Terrorist Financing.

As value of the property is considered a value what was actually paid and invested in the property.

If the property is acquired through donation, the value of the gift is specified in the contract, for the property acquired by inheritance - the value established in the succession mass, for the property obtained through an exchange - the value specified in the contract. If the property is created - the costs of establishment.

If the real estate is acquired as the gift or inheritance, but the value is not established, as value shall be considered the current cadastral value.

A person has the right, completing the financial status declaration, Part III "previously undeclared taxable income", to declare the gained income from January 1, 1991 to December 31, 2007, what at that time was subject to personal income tax in accordance with the Latvian Law "On Personal Income Tax" requirements. Income shall be subject to a reduced income tax rate of 15 %.

The submission of declarations does not apply to State officials, who submit to State Revenue Service an Annual declaration.

Valters Gencs

Attorney & Founding Partner

Gencs Valters Law Firm, Riga

T: +371 67 24 00 90

Email: valters.gencs@gencs.eu