A company that has obtained a permit to carry out licensed commercial activities at the Freeport of Riga shall receive direct tax reliefs.
Direct tax reliefs
80%Corporate income tax
80% – 100%Real estate tax
An 80% rebate can be applied to corporate income tax. This means that the Freeport of Riga applies a 4% corporate income tax rate to the companies, instead of the 20% rate that is valid elsewhere in Latvia. Furthermore, when paying dividends, a company, that has the status of a licensed commercial company in the port of Riga, pays a 4% tax instead of the usual 20%.
A rebate of 80% can be applied to the real estate tax and a rebate of another 20% may be applied by a decision of the municipality. This means that the company, operating in the Freeport of Riga, shall pay tax only in the amount of 0.3% of the cadastral value of the property, or can be completely exempted from the tax. Elsewhere in Latvia, the standard real estate tax rate is 1.5% of the cadastral value of the property and should be paid once a year.
The total amount of direct tax reliefs per year can reach up to 50% of the company's capital investments (30% for large companies, 40% for medium-size companies, 50% for small companies). Therefore, a company that makes investments in the territory of the Freeport of Riga may receive significant tax reliefs.
Tax reliefs are available to any entrepreneur, which:
- has entered into an agreement with the Freeport of Riga Authority in regards of land lease or granting the right of superficies in the Freeport of Riga;
- has received a permit for carrying out licensed commercial activities in the Freeport of Riga, which is issued by the Freeport of Riga Authority for 5 years in accordance with the law;
- has entered into an agreement with the Freeport of Riga Authority in regards of investments and has received a certificate of entitlement to direct tax reliefs;
- makes investments in accordance with the submitted investment schedule.