1. TAXPAYERS
(a) INDIVIDUALS
An individual’s fiscal domicile is the place where he permanently resides.
Liability to tax in Latvia depends not so much upon a taxpayer’s domicile as upon the source of his income. We shall see under the heading “Taxable Income” the exceptions to and qualifications of this rule. The taxes to which individuals, like all other taxpayers, are liable are the graduated income-tax, the taxes on urban and rural properties, tax on trade and industry and the tax on income from capital.
If a person not domiciled in Latvia resides there for more than six months in the tax year and is not in receipt of income taxable in Latvia by reason of its source, such person will none the less be liable to pay tax on a certain income figure, computed for the whole year on the basis of certain external evidence and his standard of living. When a person spends less than six months in Latvia, his taxable income is determined, not empirically, but from the income he has actually received during his stay in the country.
(b) PARTNERSHIPS
Partnerships, which include general partnerships, joint ventures, de facto associations and other associations not possessing legal entity, are liable to the same taxes and taxed under the same conditions as individuals. They do not, however, in themselves constitute taxable entities and, while the taxes are computed on the basis of the income they enjoy, the tax is assessed against each member or partner and is divided between them according to their respective shares in the partnership or association; if the amount of individual shares is not known, the tax is divided per capita.
(c) COMPANIES
Companies comprise all associations with a legal entity — i.e., share companies, limited partnerships with share capital and co-operative societies. These companies are domiciled where they have their real centre of management, in most cases, that is, at their registered office. They are liable under the same conditions as individuals and partnerships (constituting, of course, entities taxable as such), but, for purposes of taxes on trade and industry, they have always to produce their balance-sheet and are taxed on the basis not only of their turnover and profits, but of their registered capital.