Saeima Amends Law to Enable Accession to the Convention against Bribery

Saeima Amends Law to Enable Accession to the Convention against Bribery

Saeima.lv

The Parliament of Latvia (Saeima) adopted amendments to the Law on Enterprise Income Tax, thereby improving the legal framework for preventing bribery, in the second and final reading.

Latvia had to amend its Law on Enterprise Income Tax in order to join the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.

In order to prevent misinterpretation of any regulation set forth by the Law, from now on the Law will clearly and unambiguously state that commercial bribes are to be regarded as expenditures that have to be taken into account while calculating corporate income tax. These expenditures will include tangible assets, property or other benefits which are used in committing a crime, including offering a bribe to a public official, staff member of a state or municipal institution who is not a public official, a person authorised by a public institution or a private individual.

The former wording of the Law already set forth that in calculating the corporate income tax, taxpayers had to take into account expenditures which are not directly related to their economic activity, but it was not explicitly stated that this provision also applied to tangible assets.

The summary of the relevant draft law presented by the Budget and Finance (Taxation) Committee of the Saeima states that the aim of these amendments is to prevent commercial companies from achieving their goals by means of bribery instead of fair competition in tenders.

Text: Latvian Institute