Latvia Tax Agency Clarifies VAT Exemption Criteria for Business Transfers in Asset Sale Agreements

The Latvian State Revenue Service Dec. 2 published Ruling No. P005-17/8.6.1/71561, clarifying the VAT exemption criteria for business transfers in asset sale agreements. The taxpayer, a company registered for VAT in Latvia, planned to sell its equipment business to an acquiring company that would continue economic activities in Latvia. The taxpayer sought clarification regarding VAT exemption for the transfer. Upon review, the Tax Agency clarified that: 1) if the buyer acquired all essential assets and liabilities and continued carrying on the company’s business in Latvia, the transaction qualified as a business transfer exempt from VAT; and 2) if the buyer ...