BAKU, Azerbaijan, February 12. Bilateral economic cooperation between Latvian and Turkmen companies in the field of taxation is stimulated by tax benefits, a source in the Communication Department of the Ministry of Finance and International Information Exchange Department of the State Revenue Service of Latvia told Trend.
"The bilateral economic cooperation between Latvian companies and Turkmen partners regarding taxation is stimulated by the tax benefits provided for in the Convention between the Government of the Republic of Latvia and the Government of Turkmenistan for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and on capital," said the source.
At the same time, it was noted that for potential investors of each Contracting State, a more stable tax regime is being created with respect to business income, as well as passive income such as dividends, interest and royalties, which are defined in the Tax Convention and maximum rates are set according to which the respective income may be taxed by the other state.
"Tax Convention provides for that the dividends may be taxed in the source state, where tax so charged shall not exceed 5 percent of the gross amount of the dividends if the beneficial owner is a company (other than a partnership) which holds directly at least 25 percent of the capital of the company paying the dividends and 10 percent of the gross amount of the dividends in all other cases. Interest payments or royalties may be taxed in the source state, where tax so charged shall not exceed 10 percent of the gross amount or royalties," the department noted.
Meanwhile, Turkmenistan and Latvia pay great attention to cooperation in the field of taxes, and the exchange of experience and best practices in tax legislation contributes to strengthening financial stability and creating a favorable business environment.
Both countries are actively cooperating in the development of effective tax mechanisms, contributing to attracting investment and developing entrepreneurship.