Latvia Tax Agency Clarifies VAT Liability on Transfers of Fixed Assets

The Latvian State Revenue Service Oct. 24 issued Letter No. P005-17/8.6.1/71027, clarifying VAT liability on transfers of fixed business assets. The taxpayer, an individual registered for VAT, carried out agricultural activities as an economic activity operator. The taxpayer planned to transfer material, fixed assets to the taxpayer’s new farm. The taxpayer took input deductions on the assets before the transfer, and inquired as to the VAT liability. The Tax Agency clarified that: 1) because the farm lacked its own property, it was legally impossible to “invest” in the farm; 2) the transfer or re-registration of property from the individual taxpayer ...