Latvia

A company is considered resident in Latvia if it is or should have been incorporated in Latvia.

Permanent establishment (PE)

Under the Latvian Taxes and Duties Act, a non-resident has a PE in Latvia if all three of the following conditions are met simultaneously:

• The non-resident uses a fixed place for activities in Latvia.
• That place is used permanently or has been established for permanent use.
• The place is used for the conduct of commercial activities.

A non-resident is also considered to have a PE in Latvia if one performs at least one of the following activities in Latvia:

• Uses a construction site or performs construction or installation work, or carries out supervisory or consulting activities related to such site or work.
• Uses equipment or installations, drilling platforms, and special ships intended for the research or extraction of natural resources, or carries out related supervisory or consulting work.
• Within a time period, which together exceeds 30 days in any six-month period, provides services, including consulting, management, and technical services, utilising one's employees or associated personnel.
• Uses the activity of an individual, entity, or other person for the benefit of one's commercial activities, with that person being authorised to enter into contracts on behalf of the foreign entity and exercising such authority regularly (more than once in a tax period).

PE risk for entities located in treaty countries should be tested in accordance with the relevant DTT.