Financial Services, Latvia, Taxation

Levits told journalists that flaws in the proposed royalty taxation system was one of the topic's he discussed during the video call with the prime minister.

The president said that while meeting with representatives of creative industries on Tuesday it was concluded that the planned reform of the royalties system contained "certain errors or flaws". One of such ill-considered requirement would be to pay EUR 170 in monthly social tax regardless of the person's income earned in the given month.

Karins also acknowledged shortcomings in the proposed regulation and said that coalition partners will therefore discuss possible amendments on Wednesday, while Saeima will be asked to improve the draft legislation.

"We have heard the creative party of our society and will deal with the issue on the coalition-level. I am confident that not only Saeima will support the improvements but that they will be appreciated in the creative circles as well," the prime minister said.

As reported, the Cabinet of Ministers on October 9 supported changes in the tax regime for recipients of royalties. From July 1 until December 31, 2021, payers of royalties will pay 25% from the sum that will be distributed between mandatory state social insurance contribution (80%) and personal income tax (20%).