ARCO VARA AS - NASDAQ OMX Baltic

LATVIAN TAXATION
Dividends
Pursuant to the Latvian Law on Corporate Income Tax (likums "Par uzņēmumu ienākuma nodokli"),
dividends paid by the Company to Latvian resident companies are currently exempt from Latvian
corporate income tax. Dividends paid by the Company to permanent establishments in Latvia of
Latvian non-resident companies are currently also exempt from Latvian corporate income tax provided
that the relevant non-resident company is:
(i) a company which (i) takes one of the forms listed in Annex 1 to the Law on Corporate Income
Tax, (ii) according to the tax laws of another Member State of the European Union is considered
to be resident in that State for tax purposes and, under the terms of a double taxation agreement
concluded with a third State, is not considered to be resident for tax purposes outside the European
Union, and (iii) is subject to one of the taxes listed in Annex 2 to the Law on Corporate Income
Tax, without the possibility of an option or of being exempt; or
(ii) a company which (i) according to the tax laws of another State of the European Economic Area
(other than Member States of the European Union) is considered to be resident in that State for tax
purposes and, under the terms of a double taxation agreement concluded with a third State, is not
considered to be resident for tax purposes outside the European Economic Area, and (ii) is subject
to tax equivalent to the Latvian corporate income tax in the country of its residence, without the
possibility of an option or of being exempt.
The application of the exemption from Latvian corporate income tax is subject to submission to the
Latvian State Revenue Service of a document confirming that the Company is a resident of Estonia for
tax purposes. Where the exemption does not apply, the dividends paid by the Company are subject to
Latvian corporate income tax at the rate of 15 per cent.
Pursuant to the Latvian Law on Personal Income Tax (likums "Par iedzīvotāju ienākuma nodokli"),
dividends paid by the Company to Latvian resident individuals are currently exempt from personal
income tax. The exemption will not however apply if the Company will be benefiting in Estonia in the
year when the dividends are declared or the previous year from tax reliefs or allowances equivalent to
those available under Latvian law other than the Law on Corporate Income Tax.
Capital Gains
Pursuant to the Law on Corporate Income Tax, income obtained by Latvian resident companies from
the sale of the Shares is not subject to the Latvian corporate income tax provided that the Shares at the
time of the sale remain listed on the Tallinn Stock Exchange or another regulated market of a Member
State of the European Union or the European Economic Area.
Pursuant to the Law on Personal Income Tax, income obtained by Latvian resident individuals from
the sale of the Shares is not subject to the Latvian personal income tax if the Shares sold are the
individual’s personal assets. However, the income obtained by a Latvian resident individual from the
sale of Shares is subject to Latvian personal income tax at the rate of 25 per cent if the Shares were
acquired by the Latvian resident individual for the purpose of their subsequent resale or if the
acquisition and subsequent sale of the Shares is considered part of the Latvian resident individual’s
personal business.
Stamp Duty and Other Transfer Taxes
There are currently no Latvian stamp duties or other transfer taxes payable on the transfer of Shares.
However, fees and charges may be levied by financial intermediaries involved in custody or transfer of
the Shares.
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