Sorainen is representing the consumer credit service provider 4finance before the Constitutional Court in a dispute with the legislator regarding the procedure for calculating and paying the new enterprise income tax (EIT) surcharge. As of 1 January this year, the legislator has obliged consumer credit service providers to pay an EIT surcharge of 20% of the previous year’s profits in addition to the EIT. However, when paying the surcharge, the total flow-through dividends accrued in the previous years and distributed in the pre-tax year may not be deducted from the basis for calculating the CIT surcharge. Meanwhile, subject to an appeal, the law precludes a reduction in the amount of CIT payable on the total flow-through dividends accumulated in previous tax years. Thus, although the aim of the legislator was to establish advance payments of CIT, the contested norms in fact introduce a new object of CIT: flow-through dividends.
Litigation is ongoing.
Our team
The Sorainen team led by senior associate Katrīne Pļaviņa-Mika consists of partners Andris Tauriņš and Aija Lasmane, senior associate Edgars Hercenbergs, associate Katrīna Bičevska, and assistant lawyer Andīna Brīvule.
