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European Legal update: 20.03. – 31.03.2025.
Assistant lawyer Liis Pormeister compiled the material. Competition The Commission finds that an arbitration award ordering Spain to pay compensation in favour of Antin is illegal and incompatible with state aid Decided: 24 March 2025 The European Commission has concluded that an arbitration award, in which Spain is ordered to compensate Antin for modifying a renewable electricity support measure, constitutes illegal State aid. The Commission considered that the arbitration award, and in any event, its implementation, payment, or execution, constitutes State aid within the meaning of Article 107(1) of TFEU, which is prohibited unless it is approved by the Commission […]
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Client alert: Lithuanian Competition Council intensifies scrutiny of defence sector
With Lithuania’s defence budget increasing, the Lithuanian Competition Council (LCC) has identified the defence sector as one of the key enforcement priorities for 2025. As a result, the LCC will closely monitor procurement processes to prevent anti-competitive agreements, and is working with the Ministry of National Defence to ensure compliance with competition laws. This follows a broader trend of heightened regulatory attention to the defence sector, highlighted in 2023 by the first-ever prosecution of a defence industry cartel by the European Commission (EC). Risks and Sanctions for Competition Law Violations Companies operating in the Lithuanian defence sector must carefully assess […]
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European Legal update: 04.03. – 17.03.2025.
Assistant lawyer Liis Pormeister compiled the material. Data and technology Regulation (EU) 2025/327 on the European Health Data Space published in OJ Published: 5 March 2025 Official publication has been made of Regulation (EU) 2025/327 of the European Parliament and of the Council of 11 February 2025 on the European Health Data Space. The regulation aims to establish the European Health Data Space, which will enhance access to and control over personal health data for individuals. It will promote the use of this data, amongst other sectors, in healthcare, research and policymaking. The Commission launches the process to allow free […]
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Piracy, patents & design law: the latest legal developments in the Baltics
Welcome to our latest newsletter, where we explore key legal developments shaping the Baltic region and beyond. This edition covers significant changes in EU design law, offering businesses stronger protection for digital and industrial designs. In Latvia, intellectual property challenges arise as the success of the Oscar-winning animated film Straume fuels piracy concerns, while a new copyright debate surfaces over the use of a famous literary title in cinema. Lithuania sees landmark court rulings on TV format copyrights and patent disputes in the pharmaceutical sector. Meanwhile, Estonia hosts major discussions on intellectual property for startups, copyright protection in music, and […]
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European Legal update: 17.02. – 04.03.2025.
Assistant lawyer Liis Pormeister compiled the material. Energy Commission presents the Clean Industrial Deal for competitiveness and decarbonisation in the EU Published: 26 February 2025 The Commission presented the Clean Industrial Deal, which is a business plan to support the competitiveness and resilience of Europe’s industry. The Deal will accelerate decarbonisation while securing the future of manufacturing in Europe. This framework can drive competitiveness as it gives certainty and predictability to companies and investors that Europe remains committed to becoming a decarbonised economy by 2050. See also: press release. Tax The Council adopts new legislation on electronic VAT exemption certificate […]
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Employee Share Option Card 2025
“Employee Share Option Card” provides an overview of the tax implications associated with employee share options across the Baltic States — Estonia, Latvia, and Lithuania. It outlines the tax incentives and potential risks related to these options, serving as a guide for employers and employees considering or managing share option schemes in these countries. Available here: Employee Share Option Card 2025 Check out our Taxes in a Nutshell 2025 and Transfer Pricing Card 2025. Subscribe here if you would like to receive tax-related newsletters and updates directly in your email. Read more about our Tax practice. Contact the experts: Dr […]
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EU Sustainability Omnibus proposals
On 26 February 2026, the European Commission announced a package of proposals intended to simplify EU rules related to sustainability reporting (CSRD) and due diligence (CS3D). According to the announcement, this initiative aims to reduce the regulatory burden on businesses and enhance the EU’s global competitiveness. In this article we will discuss the main points relevant to business, as well as the expected next steps. What changes has the Commission proposed as part of the Sustainability Omnibus legislation package? The package contains the so-called Omnibus I (COM/2025/80 final) and Omnibus II (COM/2025/ 81 final) proposals. Omnibus I includes the following […]
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ESG newsletter, covering Baltic States’ energy independence and other EU news
In this issue, we cover the Baltic States’ energy independence, as well as EU legal news in regard to sustainability and innovation. As always, our team is here to support you with expertise, advice and tailored solutions to meet your ESG ambitions. Let’s continue working together towards a more sustainable and equitable future. Legislative news and ESG initiatives in Estonia, Latvia and Lithuania Lithuania Last year, the parliament adopted a regulation requiring all large companies to include statistical information on gender representation in their corporate governance reports. This regulation mandates companies to detail measures taken or planned to ensure that in […]
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Taxes in a Nutshell 2025
“Taxes in a Nutshell 2025” offers a concise overview of the main corporate tax principles across Estonia, Latvia, and Lithuania. This annual publication serves as a valuable resource for businesses, tax professionals, and investors operating or considering ventures in the Baltic region, providing them with up-to-date tax information essential for informed decision-making. Available here: Taxes in a Nutshell 2025 Check out our Transfer Pricing Card 2025 and Employee Share Option Card 2025. Subscribe here if you would like to receive Tax-related newsletters and updates directly to your email. Read more about our Tax practice. Contact the experts: Dr Kaido Künnapas […]
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Tax Stories Podcast – Episode 70 – Rita de la Feria On Movies And Fairness
In this episode of Tax Stories, we welcome Rita de la Feria, a globally recognized tax expert. Rita is a Professor of Tax Law at the University of Leeds, International Research Fellow at Oxford University’s Centre for Business Taxation, and an advisor to multiple governments. She has authored five books and numerous articles, with her latest book, “Taxation and Inequalities,” set for release this summer by IBFD. She was also named among the Top 50 most influential tax professionals by International Tax Review. For more on Rita, check out Episode 2 of the Tax Stories podcast. Watch the episode here. Key Topics Discussed in This Episode: 📽️ Movies & Taxation Themes: Everything Everywhere […]
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Legal news that affects innovations in the Life Sciences & Healthcare sector
In this newsletter, we hope to draw your attention to legal news that, in one way or another, affects innovations in the life sciences and healthcare sector. Whether this relates to the early stages of product development (the Biotech and Biomanufacturing Hub) or questions related to the use of innovative products (the AI Act), innovation must still adhere to the legal frameworks that ensure safety. We, as lawyers, of course, do our best not to hinder innovation but to promote and incentivise it in a legal way. Worth noting: As of 12 January 2025 Regulation (EU) 2021/2282 on health technology […]
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European Legal update: 04.02. – 17.02.2025.
Assistant lawyer Liis Pormeister compiled the material. Technology Commission endorses the integration of the voluntary Code of Practice on Disinformation into the Digital Services Act Endorsed: 13 February 2025 The Commission and the European Board for Digital Services have endorsed the integration of the voluntary Code of Practice on Disinformation into the Digital Services Act (DSA) framework. This integration will make the Code an important benchmark for determining platforms’ compliance with the DSA. The commitments have been built on existing best industry practices. It contains areas of demonetisation, transparency of political advertising, ensuring the integrity of the services and empowering […]
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Transfer Pricing Card 2025
The Transfer Pricing Card 2025 provides a comparison of the main transfer pricing regulations across the Baltic States—Estonia, Latvia, and Lithuania. It covers key aspects such as related party definitions, documentation requirements and thresholds, accepted transfer pricing methods, and applicable penalties for non-compliance. This resource is essential for businesses operating in the region to ensure compliance with local transfer pricing laws and mitigate potential tax risks. Available here: Transfer Pricing Card 2025 Check out our Taxes in a Nutshell 2025 and Employee Share Option Card 2025. Subscribe here if you would like to receive tax-related newsletters and updates directly in […]
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European Legal update: 21.01. – 03.02.2025.
Assistant lawyer Liis Pormeister compiled the material. Biotechnology and health Commission launches a new Biotech and Biomanufacturing Hub to support innovative companies Launched: 30 January 2025 The Commission has launched a new Biotech and Biomanufacturing Hub to support companies in bringing innovative products to the EU market and increase their competitiveness. The Hub will also help companies identify the support available to them at EU level and how to access this support to help them to expand and grow. It explains in an easy and accessible way different crucial information regarding, among others, the sources of EU funding available and […]
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New description of measures to prevent violence and harassment at work: what every employer must do?
The Order of the Chief State Labour Inspector of the Republic of Lithuania Approving the Description of Measures to Prevent Violence and Harassment at Work (Description) came into force on 1 January 2025. The Description details the requirements of the Labour Code for the prevention of violence and harassment. The Description lays down specific binding rules for all employers to prevent and reduce the risk and consequences of violence and harassment at work. In this newsletter, we will discuss the main new requirements introduced by the Description and the steps that every employer must take to avoid potential disputes. Prevention […]
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ESG-focused newsletter with updates related to the EU and the Baltics
In this edition, we cover key EU policy shifts, groundbreaking sustainability strategies, and innovative projects shaping the future of Estonia, Latvia and Lithuania. As always, our team is here to support you with expertise, advice and tailored solutions to meet your ESG ambitions. Let’s continue working together towards a more sustainable and equitable future. Legislative news and ESG initiatives in Estonia, Latvia and Lithuania Lithuania Vilnius was chosen as European Green Capital 2025 for its strong commitment to sustainability and signed the Green City Accord. This European initiative encourages cities to work towards cleaner air, better water quality, more efficient […]
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Baltic M&A market overview 2024: the year of revival
Last year marked a revival for the Baltic M&A market, and we anticipate that 2025 will bring even stronger growth. The end of 2024 and the start of this year have been particularly intense for our M&A team, leaving us with an optimistic outlook! According to Mergermarket data, the total number of announced deals in 2024 grew by 39% compared to 2023, with disclosed deal values increasing even more, nearing the record levels of 2021–2022. Deal-making rose across all Baltic States, and the number of transactions with nine-digit values increased significantly: in 2023, there were only three deals at or […]
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Dr. iur Violeta Zeppa-Priedīte attended the first meeting of the European Commission Expert Group on EU Criminal Policy
On January 21, the first meeting of this year’s European Commission Expert Group on EU Criminal Policy took place in Brussels, which was also attended by our Head of Corporate Crime Investigations and Compliance Practice, sworn attorney Dr. iur. Violeta Zeppa-Priedīte. “I am impressed by the strength of the know-how and competencies of the experts in this expert group. Discussions on such non-routine issues as the ‘Future of EU Criminal Law’ and others open up space for ‘out of the box’ thoughts and ideas, which is fascinating. At the same time, it is a pleasure to have space in the […]
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European Legal update: 07.01. – 20.01.2025.
Assistant lawyer Liis Pormeister compiled the material. Technology Commission welcomes the integration of the revised Code of conduct on countering illegal hate speech online into the Digital Services Act Published: 20 January 2025 The Code of conduct+ was signed by Dailymotion, Facebook, Instagram, Jeuxvideo.com, LinkedIn, Microsoft hosted consumer services, Snapchat, Rakuten Viber, TikTok, Twitch, X and YouTube. It will strengthen the way online platforms deal with content that EU and national laws define as illegal hate speech. Following the integration, online platforms who are designated under the DSA can adhere to the Code of conduct+ to demonstrate their compliance with […]
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The Baltic Times: Reflections on news from the USA on the criminal conviction of Mr Donald Trump
Last week, in the world news, one of the “hottest” news was the announcement of Donald Trump, who has become the first former and newly elected U.S. president to be found guilty of criminal charges. Authors: Sorainen Law Firm, Corporate Crime Investigations and Compliance attorneys: Dr. iur. Violeta Zeppa-Priedīte, Jānis Dobelnieks, Darius Raulušaitis, Ugnė Nasvytė As explained, Donald Trump sentencing in his New York criminal case means he’ll be the first U.S. president to take office with a felony criminal conviction. Judge Juan Merchan‘s sentencing of Trump to an “unconditional discharge” places a judgment of guilt on his record just days before he […]
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Year in review: Space Law in Lithuania
Year in review Lithuania’s space law and industry have seen significant development in 2023 and 2024, building on the country’s status as a hub for small satellite manufacturing and advancing other space-related sectors, such as software solutions for the space industry. Commercial developments Since launching the first Lithuanian small satellite in 2014, Kongsberg NanoAvionics has continued manufacturing and distributing satellites for governments, space agencies and private companies in various jurisdictions, including the United States, the United Kingdom, the United Arab Emirates and France.13 In 2023 and 2024, Kongsberg NanoAvionics has manufactured and launched more than 40 satellites. In 2025, it expects […]
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Tax Stories: What better tax regimes does Europe offer to those who want to move?
The so-called non-dom regime is being abolished in Great Britain. Capital and people often migrate to Switzerland, Spain, Italy, Portugal, Cyprus for this and other reasons. What is appealing there? Which ones could be the best tax regimes in Europe? Switzerland PIT Some cantons offer a flat PIT rate for people who do not work in Switzerland and are not Swiss citizens, without applying PIT on capital gains. PIT in this regime is applied as a % of shared expenses. For example, if the canton estimates that a person’s lifestyle in Switzerland involves spending EUR 1m per year and the […]
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Tax Stories: On amendments in Latvia as of 1.1.2025.
The main changes are related to PIT and there was already a blog about it. But everything else concerning tax amendments iz Latvia as of 2025 was not yet collected in one place. I will try to correct this omission (sorry, but it will be long). There was a separate blog about the draft personal income tax changes – as predicted, it has all materialized in the law. Pensions The dogs barked, but the caravan moved on. From January 1, 2025 to December 31, 2028, 1% of pension contribution rates has been transferred from the 2nd pension pillar to the state unfunded […]
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Tax Stories: How did art in Sweden overthrow the government in 1976?
The tax turbulence was caused by the world-famous director Ingmar Bergman and the writer Astrid Lindgren. As a result, the Social Democrats, who had been in power for 44 years, lost the elections. Art Saves the World Tax Administration Humiliates Ingmar Bergman These two cases seemed important in the context that in Bergman’s case, the tax administration effectively drove a national treasure out of the country. This story coincided with a message sent to me yesterday by a large client that after a long fight with the SRS they have decided to move their business. Others say this for speculative […]
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Tax Stories: Taxes in Estonia as of 1.1.2025.
Unlike Lithuania, where the CIT rate increased from 5% to 6% (for small businesses) and from 15% to 16% for others, there are many more changes in Taxes in Estonia. What exactly has changed there? Income tax CIT and PIT rates increased from 20% to 22%; The 14% CIT rate (+7% PIT if the recipient is a natural person) for regularly paid profits has been abolished; The CIT payable in advance by credit institutions has been increased from 14% to 18%. In the automatic account mode (similar principle to our economic activity income account system), the 2nd pillar pension fund rate […]
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Tax Stories: We can ask the SRS a lot more
I wrote about the info obtained by the ‘Financial Times’ in the UK about the increasing number of cases of voluntary income declaration. We also have a similar law, which allows you to obtain info. Freedom of Information Act FT was based on the UK Freedom of Information Act. Could a similar Latvian law be applied to the SRS? Individuals can request information held by the SRS, and the SRS is obliged to respond within the specified time limit, except in cases where the information is restricted or classified. Certainly, many, especially journalists, could be more interested in removing the […]
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Tax Stories: Forced To Report Voluntary
The FT reports that the number of people reporting their undeclared foreign assets to the UK tax authorities has increased by 22%. Why are people reporting more often? People are not reporting voluntarily What has forced them to do this in the last year? The Financial Times article says that: The UK budget has allocated funds for the tax administration to hire an additional 5,000 people to check taxpayers; the administration has sent out many more and more precisely targeted letters (a la, we see you now); more and more information is coming from the CRS system, as more and more offshore jurisdictions […]
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Tax Stories: Rule Or An Exception?
Recently, there have been several interesting stories from various sources on the topic of art galleries. As usual, in this case, too, one cannot do without dealing with taxes. Cash transactions? Shortly before Christmas, I purchased this wonderful work by artist Krista Dzidzulo, made with charcoal, at an auction organized by the Kim? gallery. When I shared this happy moment with a friend, he winked and said that you should be careful, because this industry does not have a good reputation, because works are often paid for in cash. Thus, there are even conflicts between parties to transactions that can […]
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European Legal update: 10.12. – 06.01.2025.
Assistant lawyer Liis Pormeister compiled the material. Technology Measures from the Common Charger Directive (2022/2380) now apply to all electronic devices sold in the EU Published: 28 December 2024 The Council of the EU approved the EU’s Common Charger Directive in October 2022, and manufacturers were given a transition period to adjust their designs and ensure compliance. The rules apply to mobile phones, tablets, digital cameras, headphones, headsets, videogame consoles, portable speakers, e-readers, keyboards, mice, portable navigation systems and earbuds sold in the EU from 28 December 2024. Now, all new devices sold must support USB-‑C charging. The measures will […]
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2025 to bring economic growth to Estonia
Estonia’s economy has faced challenges over the past three years. However, a turning point is within reach, with signs of growth becoming evident, as highlighted on the podcast Sorainen Frequency by our Country Managing Partner, Kaupo Lepasepp, and the Prime Minister of the Republic of Estonia, Kristen Michal. The Prime Minister aims to return to the roots of Estonia’s success – emphasising freedoms and rights, balanced with civic responsibilities, minimal but necessary red tape and regulations, and a focus on security. According to the Prime Minister, an ideal country is characterised by a low tax burden, straightforward administration, and greater […]
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Tax Stories: One Hundred Years Of Solitude
A new TV series “One Hundred Years of Solitude” based on the famous book by Gabriel García Márquez has appeared on Netflix. Definitely recommended for your Christmas holidays. What does this have to do with taxes? A Treadmill I certainly don’t want to hurt the feelings of Márquez fans, but I still remember the moments when I would spent hours on MyFitness club treadmill roll while listening to this seemingly endless audiobook, and I never quite understood why I was doing it (I mean – going through the entire book). The biggest problem was remembering and not mixing up the […]
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NIS 2 Directive – the EU’s update to the cybersecurity framework
To address the expanding cyber-threat landscape and the emergence of new challenges, the European Union has adopted new legislation to ensure a uniform high level of cybersecurity across the union. The NIS 2 Directive (Directive 2022/2555) replaces the previous NIS 1 Directive (Directive (EU) 2016/1148). The NIS 2 Directive introduces significant changes compared to its predecessor NIS 1. What you need to know: management board members can be held liable for non-compliance with cybersecurity requirements the scope of the directive has been expanded to include more sectors and entities requirements for cybersecurity governance and risk management measures have been enhanced […]
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Tax Stories Podcast – Episode 67 – Anna Gunn On Tax Ethics
Anna Gunn is teaching, consulting and blogging on the topic of tax ethics – an increasingly hot topic among tax professionals and businesses alike. There is a video option of this conversation, too, on the Tax Stories YouTube channel. Anna Anna Gunn is a consultant specialised on tax ethics and tax communication (trainings, advising board meetings), a lecturer of tax ethics at Maastricht University & University of Curacao, a blogger on these topics, has been for 8.5 years with a Big4, studied at the Universities of Cambridge and Leiden. On many occasions I thought that we are a bit alike in our searches of creative expressions […]
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Sorainen ESG-focused newsletter, December
In the newest issue of the Sorainen ESG newsletter we explore pivotal EU decisions, forward-thinking green policies, and inspiring projects driving sustainability in Estonia, Latvia and Lithuania. Legislative news and ESG initiatives in Estonia, Latvia and Lithuania Lithuania The Lithuanian Parliament recently adopted amendments to the Code of Administrative Offences. Under the amended legislation, entities that submit incorrect financial, management or sustainability reports, or fail to submit these reports on time to the Legal Entity Registry will face administrative penalties. The maximum fine for such offences has been set at up to EUR 1,450. In October, the Lithuanian Parliament adopted […]
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Life Sciences & Healthcare newsletter on preparations for 2025
The year has passed in the blink of an eye. We’ll skip the recap and instead start looking forward to 2025 already. Next year will bring us many interesting but also challenging legal developments in the life sciences and healthcare sector. We will hereby give you a short overview of the upcoming changes. The Health Technology Assessment Regulation (HTAR) will apply from January 2025 The new EU Health Technology Assessment Regulation (HTAR) aims to streamline access to innovative health technologies for patients across the EU. To do so, the HTAR foresees that certain health technologies will be subject to joint clinical […]
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Understanding criminal background checks in the Baltics
Criminal background checks are an important but sensitive aspect of employment processes. Article 10 of the EU 2016/679 General Data Protection Regulation (GDPR) sets out a special regime for processing personal data related to criminal convictions and offences, ensuring that such information is handled responsibly and lawfully. Under Article 10 of the GDPR, each EU member state can decide on their own particular set of rules for processing the criminal data of candidates and employees. Employers must navigate these regulations, balancing their operational needs with the fundamental rights of individuals. This article explores the regulatory frameworks in Estonia, Latvia and […]
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Stricter procedures established for attracting foreign labour in Latvia
According to the currently applicable procedure, an employer who plans to employ third-country nationals has to publish a vacancy with the State Employment Agency (“Employment Agency”) and, if the vacancy remains free for at least 10 business days, the employer is entitled to apply to the Office of Citizenship and Migration Affairs (“OCMA”) for approval of an invitation to request a visa or a temporary residence permit for a foreigner. However, on 10 December 2024, the Cabinet of Ministers adopted amendments (“Amendments”) to Cabinet of Ministers Regulation No. 55 of 28 January 2014 “Regulations on the Employment of Foreigners”, establishing […]
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Tax Stories Podcast – Episode 65 – James Parker
James Parker is a former McKinsey consultant focusing on strategy of companies. I also wanted to learn more about his book on strategy of professional firms, and his experience of working in Zaire. Listen to the podcast here. James Parker: a partner at Parma Consulting Group (strategy consulting partnership, focused on financial institutions, professional services, information intensive businesses and not-for-profit); an author of Changing the Leopard’s Spots. Renewal of the Professional Firm – a summary of the strategic positioning choices for professional firms; Lecturer at Rotterdam School of Management, Erasmus University; was a consultant at McKinsey & Company for 7 years; was a manager […]
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Lexology: The Media and Entertainment Law Review
In-Depth (formerly The Law Reviews): Media and Entertainment Law offers a practical overview of the legal and regulatory frameworks governing the media and entertainment industry, including print, broadcasting and online publication. Focusing on prominent recent trends and developments, it examines issues including free speech and media freedom, IP rights, competition and consumer rights, common contractual disputes, and much more. In the most recent issue our offices in Estonia, Latvia and Lithuania offer insight into the challenges, changes, and legal developments the Baltic region’s entertainment industry has experienced in the last year. Estonia Significant changes are happening in the media and […]
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European Legal update: 12.11. – 25.11.2024.
Assistant lawyer Natālija Ķīse compiled the material. Environmental, Social & Governance (ESG) Environmental, social and governance (ESG) ratings: Council greenlights new regulation Adopted: 19 November 2024 The Council adopted a regulation on environmental, social and governance (ESG) rating activities. To increase investors’ trust in sustainable financial products, the new regulation seeks to make grading practices in the EU more uniform, transparent, and comparable. ESG ratings evaluate a company’s or financial instrument’s sustainability profile by evaluating its exposure to sustainability-related risks as well as its effects on society and the environment. See also press release. Trade & Consumer goods Council passes a prohibition […]
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Sorainen ESG-focused newsletter, November
In the newest issue of the Sorainen ESG newsletter we bring you the latest updates on environmental, social and governance trends across the European Union and the Baltic States. This month’s issue features crucial insights into recent EU-level developments and sustainability initiatives, along with some interesting news from Estonia, Latvia and Lithuania. Legislative news and ESG initiatives in Estonia, Latvia and Lithuania Lithuania The Minister of the Environment has approved Construction Technical Regulation STR 2.01.12:2024 “Construction climatology”. This determines the statistical characteristics of climate parameters, necessary for territory planning, design and construction. Climatic information includes solar radiation, air temperature, absolute […]
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European Legal update: 29.10. – 12.11.2024.
Assistant lawyer Natālija Ķīse compiled the material. Consumer protection Commission warns the online market Temu of possible violations of EU consumer protection law Published: 8 November 2024 Consumer Protection Cooperation (CPC) Network of national consumer authorities and the European Commission informed the online market Temu about some actions on the platform that break EU consumer law after a joint investigation at the European level. The joint study by the CPC Network looks into plenty of various activities that people do when they shop on Temu, including things that might trick people or unfairly affect their decisions about what to buy. […]
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The impact of the defence tax on individuals
Taxation of individual income in Estonia is generally straightforward and there are few exceptions. Since the new defence tax essentially creates a parallel system to the current income tax, it would be wise to take note of what the coming years may bring. The provisions governing the defence tax largely refer to the Income Tax Act (ITA), which covers the tax base and withholding rules. Income of resident individuals According to the draft legislation, the income of resident individuals will be subject to the defence tax, defined in accordance with sections 12–22 of the ITA. This means that the defence […]
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Is it better somewhere else?
Is it better elsewhere? That’s a question that must be answered today by a number of British residents, most of whom have been able to benefit from a tax regime that does not apply to permanent residents (by being beneficiaries of the so-called non-domiciled regime). The United Kingdom has announced that its hitherto favourable tax regime for wealthy businesses and individuals will change, and that, as a matter of priority, it will abolish the existing tax exemption on non-territorial income and will increase taxation on capital gains to the level of ordinary income tax. The moment of truth will come […]
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Defence tax to impact Estonia’s tax system’s treatment under Pillar Two?
The defence tax bill currently under discussion in the Estonian Parliament may impact Estonia’s approach to adopting Pillar Two rules, thus affecting all Estonian entities belonging to a Pillar Two group. Whether your group has reached the 750 million EUR revenue threshold already or will cross that bridge by FY 2030, this change is likely to impact how you decide to make future distributions. Estonia is set to adopt legislation imposing a defence tax that includes a 2% CIT on accounting profits for Estonian resident companies, permanent establishments of non-resident companies and non-residents to the extent their income is taxable […]
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The main changes to the Estonian tax system from 2025
Estonia is in the midst of tax reforms. Hence, it is good to know what will change from 2025 and how it might affect your actions in Estonia. Changes that have already been passed into law but are yet to come into force A) Income tax The income tax rate will increase from 20% to 22%. This increase will apply both to legal and natural persons. Corporate income tax (CIT) will apply upon distribution of profits. The lower 20% rate of CIT will apply to payments made up to December 2024 at the latest. Payments made from January 2025 will […]
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Defence tax – the plan to introduce a new 2% profit tax
The Estonian Government is planning to introduce a 2% annual income tax for natural persons and companies, payable in quarterly payments and all wrapped in a nice package as the “defence tax”. Besides the cost of the tax, it might cause cash flow and solvency issues for many people and companies. Therefore, as the first tax base year is 2025, it makes sense to keep a close eye on the progress of the bill and to make sure you are ready. Current Estonian corporate income tax system – 0% tax until profit distribution Currently, Estonian companies enjoy a deferred corporate […]
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Key changes to the Labour Code – October 2024
We invite you to review the latest amendments to labour laws adopted in October, which are relevant to businesses. Most changes will take effect on 1 January 2025, although some are already in force. New rates of overtime pay and other changes From 1 January 2025, overtime on public holidays during the night must be paid at a rate of at least 2.5 times an employee’s regular salary. Previously, the Labour Code did not specify an overtime rate for work on public holidays during the night. Employers will now also require written consent from employees for overtime work, whereas previously […]
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European Legal update: 16.10. – 29.10.2024
Assistant lawyer Nikola Cīparsone compiled the material. ESG Council gives final green light to strengthen standards in the EU – air quality Adopted: 14 October 2024 The Council has formally adopted a directive setting updated air quality standards across the EU. These new rules are expected to contribute to the EU’s objective on zero pollution by 2050 and are meant to help prevent premature deaths due to air pollution. EU citizens will be able to seek compensation for damage to their health in cases where EU air quality rules are not respected. See also: Press release Start-up & TMT Commission joins forces […]
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Requirements applicable for foreigners who are third-country nationals, for changing employer or a job function with the same employer
It is commonly known that in order to live and work in Lithuania a foreigner who is a third-country national must first obtain the corresponding residence permit in Lithuania. In certain cases, a decision from the Employment Service confirming that the foreigner corresponds to the Lithuanian labour market needs is also required. It is often assumed that as soon as a foreigner has a suitable residence permit in Lithuania, then an employment contract can be concluded with him/her, and that is definitely possible to change a job function at the same employer. But this is a mistake – and a […]
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Sorainen ESG-focused newsletter, October
This month, we bring you an overview of significant updates, including adopting crucial EU regulations and new initiatives to enhance sustainability efforts. We are also pleased to highlight important news from Estonia, Latvia and Lithuania. Legislative news and ESG initiatives in Estonia, Latvia and Lithuania Status of the transposition of the Corporate Sustainability Reporting Directive (CSRD) into local law At the end of September, the European Commission decided to open infringement procedures by sending a letter of formal notice to 17 member states calling on them to fully transpose the CSRD. The Commission called on 17 Member States to fully […]
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Tax Stories: Let’s have some AI fun
This is a nice example of how quickly the AI progresses. AI created a conversation about the ‘Tax Stories’ podcast and blogs on Substack. Can you tell the difference if it’s run by real people? Listen the AI created tax podcest episode here!
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Life Sciences & Healthcare newsletter on hot topics in the Baltics
In this month’s newsletter we bring you a short overview of hot topics in the Life Sciences and Healthcare sector in the Baltics. Some of these topics were also discussed during our regional webinar on 12 September. Video of the webinar is available here. Compulsory liability insurance for healthcare providers in Estonia The new Compulsory Liability Insurance of Health Care Providers Act will enter into force on 1 November 2024. The aim of the act is to simplify the process of claiming for damages for patients if by the provision of healthcare services bodily injury, harm to health, or death […]
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European Legal update: 02.10. – 15.10.2024
Assistant lawyer Nikola Cīparsone compiled the material. Competition and regulatory Council adopts regulation on classification, labelling and packaging of chemicals Adopted: 14 October 2024 The Council has adopted a regulation on the classification, labelling and packaging of chemical substances (CLP). The CLP regulation updates the existing 2008 EU legislation, clarifies the rules on labelling chemical substances, and adapts them to different forms of trade (like, online trade or bulk sales at refill stations). The regulation also promotes the circularity of chemical products, makes labelling (as well as digital labelling) clearer and easier to read, and ensures a higher level of […]
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Amendments to the Law on Prevention of Money Laundering and Terrorism and Proliferation Financing
On 19 September 2024, amendments to the Latvian Law on the Prevention of Money Laundering and the Financing of Terrorism and Proliferation (AML Law) were adopted. Here is a look at the main changes introduced by the amendments. Exemptions for services provided to group companies The amendments clarify that outsourced accountants will not be considered obliged entities under the AML Law when they carry out their professional activities within the same group. The amendments to the Accounting Law adopted on 26 September also provide that such companies will no longer be required to obtain an outsourced accountant’s licence from the […]
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Intellectual property highlights in the Baltics
In this issue, we bring you the most significant developments in intellectual property law. First, we’ll explain how the newly enforced AI Act establishes a comprehensive legal framework for AI in the EU, including stringent copyright compliance measures. What’s more, you will learn practical strategies from our experts on how to opt out of AI training so as to protect your content. Lastly, we keep you updated on landmark rulings in Lithuania and the EUIPO’s refusal of X. Corp’s trademark application for “X.” We also provide insights from our recent webinars on the surge in pharmaceutical patent litigation in the […]
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European Legal update: 18.09. – 01.10.2024
Assistant lawyer Natālija Ķīse compiled the material. Competition The General Court’s judgement on the recovery of State aid awarded to JCDecaux by Belgium is upheld by the Court of Justice Delivered: 26 September 2024 In the appeal case JCDecaux Street Furniture Belgium v. Commission (C-710/22 P), the Court of Justice rendered its decision regarding the annulment of Decision C (2019) 4466 of the European Commission of June 24, 2019, insofar as it directs the recovery of State aid awarded to JCDecaux by the Belgian State. The lawsuit centres on an agreement between JCDecaux and the public of Brussels for the […]
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Baltic Private M&A Deal Points Study 2024: Energy & utilities sector most active in the M&A market
Despite turbulent times in macroeconomic and geopolitical situations over the past few years, the Baltic M&A market has been reasonably active, especially in Lithuania, according to the recent “Baltic Private M&A Deal Points Study 2024”. The study analysed 179 private M&A transactions with a deal value of over EUR 1 million completed in the Baltics between April 2022 and March 2024. It was conducted for the 8th time since 2009 in cooperation with Sorainen, Cobalt, Ellex, TGS Baltic, Eversheds Sutherland, Walless, and Triniti under the auspices of the Estonian, Latvian, and Lithuanian Private Equity and Venture Capital Associations. Energy and […]
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Tax Stories: Tax changes as of 1 January 2025
On 6 September a version of tax changes was made public by the MoF, which has been agreed with the social partners and will go to the parliament. The rumour says that this will become the law. The expected tax changes are as follows Minimum monthly wage: 2024: EUR 700 2025: EUR 740 2026: EUR 780 2027: EUR 820 2028: EUR 860 Fixed monthly tax-free minimum – for all from 1.1.2025: 2025: EUR 510 (pensioners: EUR 650) 2026: EUR 550 2027: EUR 570 Personal income tax rates: 25.5% – for all income up to EUR 105,300 p.a.; 33% – above […]
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Sorainen ESG-focused newsletter, September
Status of the Corporate Sustainability Reporting Directive (CSRD) transposition into local law Lithuania The provisions of the CSRD were transposed into local law on 25 June 2024 and came into force on 1 July 2024 (with the transitional periods for reporting for certain types of entities remaining the same as envisaged in the CSRD). The main local laws establishing the requirements for sustainability reporting are the Law on the Accountability of Enterprises and Enterprise Groups, and the Law on the Audit and Other Assurance Services of Financial Statements. Fines for non-compliance with the requirements are provided in the Code of […]
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European Legal update: 04.08. – 17.09.2024
Assistant lawyer Natālija Ķīse compiled the material. Tax Court of Justice rules on government support and VAT disparities in the online gaming industry in Belgium Delivered: 12 September 2024 The Court of Justice rendered a decision in which 27 Belgian gambling enterprises contested the Belgian State’s assessment of VAT on online gambling from July 2016 to May 2018. These levies came into effect after the Belgian government decided to remove the VAT exemption for online gambling, excluding lotteries. The VAT Directive provides Member States the option to treat comparable services as immovable property, as defined by the Court of Justice […]
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The special regulation regarding citizens of Ukraine has been abolished
On 1 September 2024, Order of the Lithuanian Minister of Internal Affairs No. 1V-145 “On the requirements, conditions, and provision of services for foreigners who left Ukraine due to the military actions of the Russian Federation in Ukraine or who are unable to return to Ukraine” (the Order), together with all amendments and additions, were abolished. End of special employment rules for Ukrainian nationals Accordingly, with the end of the validity of the Order, some special rules applicable for Ukrainian nationals, their family members, and stateless persons living in Ukraine who do not have the right to receive temporary protection […]
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Clients: Sorainen’s legal competence is the best in the market
According to the 2024 Baltic Kantar Prospera client survey of top-tier Baltic law firms, Sorainen ranks first in the “Best legal competence” category, as it has done for the past three years. Sorainen Estonia ranked as #1 law firm in Estonia according to overall rankings. Strongest legal fields according to clients Sorainen placed first in five out of 14 legal competence categories, including: Banking & Finance Competition & EU Employment Tax Real Estate We positioned second in the following fields: Mergers & Acquisitions Dispute Resolution Public Procurement Intellectual Property IT & Telecom, Media and Entertainment Private Equity Energy Corporate Advisory […]
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European Legal update: 21.08. – 03.09.2024
Assistant lawyer Natālija Ķīse compiled the material. Dispute resolution Amendments to the Statute and the Rules of Procedure of the Court of Justice and the General Court of the European Union enter into force Entry into force: 1 September 2024 Significant changes to the Statute and Rules of Procedure of the European Union’s General Court and Court of Justice have taken effect as of September 1, 2024. One of the main adjustments is that, as of October 1, 2024, the General Court will have certain authority over preliminary findings previously held by the Court of Justice. ESG EU’s first Sustainable Investment Facilitation […]
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How to restrict AI companies from using your content as training data?
Generative AI systems, which rely on vast amounts of data to generate new content, are evolving rapidly. These systems rely on self-training methods, using machine learning algorithms that analyse extensive databases, including images and text available on the web. However, this practice raises significant copyright concerns, particularly regarding the reproduction of data, even if only temporarily. So, how under EU copyright law can you restrict AI companies from mining your website for training data? Why is mining copyrighted data allowed in the EU? Generally, copying and use of copyrighted material online without authorisation constitutes an infringement. This means that when […]
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Discomfort payments for wind turbines in Latvia finally approved
Two years after announcing there would be discomfort compensation payments for wind turbines located in the vicinity of residential properties, the relevant amounts and payment mechanisms have been finally approved, and come into force on 30 August 2024. Below are the main points you need to know if you are a developer or a prospective operator of a wind farm, or a resident whose property is located near a wind farm under development. If you are a developer or a prospective operator of a wind farm, you need to know that: the payments will apply to wind turbines with capacities starting […]
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European Legal update: 06.08. – 20.08.2024
Assistant lawyer Nikola Cīparsone compiled the material. Technology TikTok commits to permanently withdraw TikTok Lite Rewards programme from the EU to comply with the Digital Services Act Committed: 5 August 2024 The Commission has made TikTok’s commitments to permanently withdraw TikTok Lite Rewards programme from the EU binding. The platform has made a commitment to permanently withdraw the TikTok Lite Rewards programme from the EU, and a commitment not to launch any other programme which would circumvent the withdrawal. Commission sends request for information to Meta under the Digital Services Act Sent: 16 August 2024 The Commission has sent Meta a request […]
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Booking Group and Chemispec acquire a sizeable office building in Latvia
We are happy to have assisted our clients Booking Group and Chemispec in a transaction for the acquisition of a 10,500 m² office building, located on Meistaru iela, Valdlauči, Ķekavas novads, Latvia, from Laurus Gene UAB. The office building is well-known as the current headquarters of SEB banka in Latvia. Our assistance We assisted our clients with legal and tax due diligence on the target, as well as drafting and negotiating the transaction documents. We also worked on receiving of merger approval from the Latvian Competition Council for the transaction. Our team Our core team for the transaction consists of […]
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Practical application of AI in legal services: our vision
Irina Seniut, Head of Knowledge Management and Innovation at Sorainen, shared our AI journey with the Lexpo’24 audience and spoke about the AI@Sorainen workgroup. Lexpo is an annual conference in Amsterdam dedicated to reshaping the legal industry through innovation and technology. It is designed for forward-thinking law firms and in-house corporate legal departments. AI@Sorainen The innovative approach of the AI@Sorainen workgroup, comprised of 20 seasoned professionals with diverse backgrounds in legal, IT, finance, business analytics, marketing, knowledge management, and innovation, has garnered international attention from other law professionals. Established a year ago, the workgroup has achieved significant milestones, including releasing […]
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European Legal update: 23.07. – 05.08.2024.
Data protection European Artificial Intelligence Act comes into force Entered into force: 1 August 2024 On August 1 the European Artificial Intelligence Act (AI Act), the world’s first comprehensive regulation on artificial intelligence, entered into force. The AI Act ensures that AI developed and used in the EU is trustworthy, with safeguards to protect people’s fundamental rights. The regulation aims to establish a harmonised internal market for AI in the EU, encouraging the uptake of this technology and creating a supportive environment for innovation and investment. See also: Press release The Lithuanian Supervisory Authority (SA) fined Vinted, UAB €2,385,276 for […]
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Enhancing sanctions effectiveness: key changes in EU best practices
On 3 July 2024 the Council of the European Union published an update to the EU Best Practices for the effective implementation of restrictive measures (Best Practices), which introduced several changes. The Best Practices are to be considered non-exhaustive recommendations of a general nature for the effective implementation of EU restrictive measures (sanctions). They play a significant role in the application and interpretation of EU sanctions regulations. In this article, the authors Senior Associate Edvīns Draba and Associate Kristers Pētersons provide a short description of the main changes to the EU Best Practices. Ownership test The EU has revised its approach […]
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European Legal update: 09.07. – 22.07.2024.
Assistant lawyer Natājlija Ķīse compiled the material. Human Rights ECtHR: no discrimination in Latvian pre-school language reform Delivered: 18 July 2024 A unanimous ruling was reached by the European Court of Human Rights in the case of Djeri and Others v. Latvia, concluding that the European Convention on Human Rights’ Article 14 (prohibition of discrimination) and Article 2 of Protocol No. 1 (right to education) had not been violated. The 2018 Latvian education reform that decreased the use of Russian and raised the use of Latvian in preschools was the subject of this case. Data Protection EDPB adopts key […]
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Biomethane export and Guarantee of Origin: navigating Latvian law
What is a Guarantee of Origin? A Guarantee of Origin (GoO) for gas certifies that a portion of the energy has been sourced from renewable energy resources. According to Section 117.1, Subsection 1 of the Energy Law, GoOs serve this specific purpose. Section 117.3, Subsection 1 further specifies that the transmission system operator (TSO) issues and manages these GoOs, under the European Energy Certificate System or another European documentation scheme. This scheme governs the issuance and cancellation of GoOs for gas, and the TSO also provides the necessary requirements and documentation for obtaining a GoO on its website. Additionally, the […]
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The “Data Transfers – Estonia” article has been updated
Our partner Mihkel Miidla, senior associate Liisa Maria Kuuskmaa, and associate Stella Victoria Ojala updated the article “Data Transfers – Estonia” published in OneTrust DataGuidance in June. According to Liisa Maria Kuuskmaa, the article is updated annually to reflect changes in legislation, new court and administrative practices, and other news in this field. Kuuskmaa believes the article benefits all businesses and institutions involved in processing personal data in any way. “Primarily, it is relevant for those who transfer personal data outside of Europe as part of their operations, for instance, using service providers located outside of Europe,” she adds. “The […]
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Ober-Haus: Baltic real estate market still challenging, but opportunities open up
Ober-Haus presents its annual real estate market report for 2024 on the capital cities of the Baltic countries. The report covers the office, retail, warehousing, residential and land markets in each of the capital cities: Riga, Tallinn and Vilnius. Our Baltic-wide team of real estate legal experts prepared legal notes for the report. Baltic real estate market in 2023: slowdown continues The year 2023 was full of challenges for the Baltic real estate markets: an economic slowdown, declining activity in the residential and commercial real estate market, a rising number of unsold apartments, higher office vacancy rates and slowing construction […]
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The Baltic Times: What is white-collar crime?
The article was prepared by Sorainen heads of Corporate Crime Investigations and Compliance Dr. iur Violeta Zeppa-Priedīte (Latvia) Norman Aas (Estonia) Darius Raulušaitis (Lithuania) With the association of the White Collar Crime team Agneta Rumpa; Krista Niklase; Jānis Dobelnieks; Hannelora Voiciša; Paula Šūtava; Kristers Pētersons Introduction One of the areas in which Sorainen assists clients is criminal law. Historically, as Sorainen was established as a law firm for corporate clients, assistance in this area has been focused on “white-collar crime”, which is basically crime in the fields of economic crime, financial crime, tax, customs, corporate governance or corruption. The English-language term “white-collar […]
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European Legal update: 25.06. – 08.07.
Assistant lawyer Natājlija Ķīse compiled the material. Banking and finance EBA issues new guidelines to combat money laundering and terrorism financing in fund and crypto transfers Published: 4 July 2024 New guidelines on the “travel rule” have been announced by the European Banking Authority (EBA) to address the issue of money laundering and terrorism financing through the transfer of funds and cryptocurrency assets. The information that must be included with such transfers is outlined in these Guidelines, along with the procedures that payment service providers (PSPs), intermediate PSPs (IPSPs), crypto-asset service providers (CASPs), and intermediary CASPs (ICASPs) must follow to identify […]
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Sorainen ESG-focused newsletter, Summer edition
CSRD transposition status in Lithuania, Latvia and Estonia On 5 January 2023, the Corporate Sustainability Reporting Directive (the CSRD) entered into force. The CSRD requires large companies and all listed companies (except listed micro-enterprises) to disclose information on what they see as the risks and opportunities arising from social and environmental issues, and on the impact of their activities on people and the environment. A broader set of large companies, as well as listed SMEs, will now be required to report on sustainability. Some non-EU companies will also have to report if they generate over EUR 150 million in the […]
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Changes to the law on protecting personal data – what to expect and how to prepare?
From 1 July 2024, amendments to the Law on Personal Data Protection of the Republic of Lithuania (the Law) came into force. These amendments not only give the employer the right to ask a candidate or an employee to provide information on criminal records, but also introduce new rules on the public disclosure of decisions of the supervisory authority, the handling of complaints, and other procedural issues. Do we need to prepare for these changes and, if so, how? Employers can ask candidates or employees to provide a criminal record certificate What has changed? Until 1 July 2024, the law […]
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Investment card 2024
Welcome to our comprehensive guide on doing business in Estonia, Latvia, and Lithuania. This document is designed to provide potential investors with an insightful overview of the most relevant commercial conditions in these dynamic Baltic countries. Whether you are considering expanding your business operations, setting up a new venture, or simply exploring opportunities in this region, this guide will equip you with the essential information you need to make informed decisions. Importance of the Baltic Region for Investors Estonia, Latvia, and Lithuania, collectively known as the Baltic States, have emerged as attractive destinations for international investors. Their strategic location, skilled […]
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Assessment of the Court of Justice of the European Union on the limitation period for criminal liability
The limitation period is among the institutions of criminal law for which correct understanding and application is crucial to the final outcome of a case. On the one hand, errors can lead to significant prejudice to the rights of persons entitled to a defence. On the other hand, errors may also create conditions enabling criminal liability to be avoided, which of course prejudices the interests of society as a whole, including the right to general security. Like any other issue of importance for the final resolution of cases, this issue has been much discussed in Latvian criminal law practice and […]
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Essential changes in the regulation of employment of third-country nationals: what employers need to prepare for?
Recently, several proposals have been registered in our country to change the Lithuanian legislation regulating the legal status of foreigners in Lithuania and their right to work. As a result, employers and third-country workers will be obliged to comply with them, which requires preparation in advance. Ana Borovko, senior associate at Sorainen law firm, outlines some vital potential changes and their implications. The following proposals have already entered into force on 1 July 2024: The proposal to allow a foreigner holding a temporary residence permit for work (as for non-highly skilled employee) to change employer only after 6 months “This […]
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Annual Report of Sorainen Latvia: Sorainen retains market leadership position in Latvia
Sorainen Latvia Annual Report 2023 Independent auditors’ report The reporting period has closed successfully. The turnover of the Latvian office increased by 12% compared to the previous reporting year and amounts to EUR 9.4 million. The profit of the office is EUR 2.14 million, showing a 46% increase compared to the previous period. Meanwhile, net assets increased by 14% or EUR 285,000 during the year. As was the case last year, in this reporting year the turnover of Sorainen office is the highest among Latvian law firms. […]
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Annual Report of Sorainen Estonia: 2023 had economic challenges, but was strategically strong
Annual reports have been published on the Company Registration Portal of the Estonian e-business register. The Sorainen office in Tallinn continues to be one of the biggest employers in the legal market in Estonia. The average number of employees in the firm has grown organically since its foundation in 1995, reaching 85 employees in 2023 (jumping up from 82 in 2022). The circle of owners also widened as Maria Pihlak, head of the firm’s International Arbitration sub-practice in Estonia, was promoted to partner. For several years, we have been among the legal sector’s biggest payers of state taxes. In 2023, […]
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Life Sciences & Healthcare newsletter, June 2024
This month’s Life Sciences & Healthcare newsletter bring you a short overview of how off-label use of medicinal products is regulated in the Baltics. This is especially interesting in the light of the recent judgement of the European Court of Justice on off-label use of medicinal products. Risk-benefit balance includes risks resulting from off-label use The judgement of European Court of Justice dated 15 May 2024 pertains to off-label use and its connection with the suspension, revocation and variation of marketing authorisation (MA) by the competent authorities, pursuant to Article 116 of Directive 2001/83/EC on medicinal products for human use. The […]
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The Baltic Times: How will Global Minimum Tax impact companies in the Baltic?
Author: Aija Lasmane, Sorainen Tax partner What is Global Minimum Tax? On October 8, 2021 an agreement between OECD countries was reached on two work directions regarding business income taxation, of which: the first pillar relates to new profit-sharing rules, which aim to redistribute the surplus profits of large international groups to jurisdictions where consumers or users are located, regardless of whether the group companies are physically located in those jurisdictions. The first pillar is still under discussion; the second pillar envisages the introduction of a Global Minimum Tax for large international business groups. Both pillars aim to address different […]
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European Legal update: 29.05. – 10.06.
Assistant lawyer Nikola Cīparsone compiled the material. Banking and finance Commission Delegated Regulation (EU) 2024/1504 specifying the procedural rules for the exercise of the power to impose fines or periodic penalty payments by the European Banking Authority on issuers of significant asset-referenced tokens and issuers of significant e-money tokens Published: 30 May 2024 The regulation, issued on 22 February 2024, outlines procedural rules for the European Banking Authority (EBA) in imposing fines and periodic penalty payments on issuers of significant asset-referenced tokens and e-money tokens. It supplements Regulation (EU) 2023/1114 on markets in crypto-assets. Individuals or entities under […]
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Tax Stories Podcast – Episode 59 – Raigo Uukkivi
Raigo Uukkivi is a head of the Estonian tax administration. In this Tax Stories episode we mainly tried to compare Estonia and Latvia – tax systems, tax administrations & discussed Baltic unity. Listen to the podcast here ! In the podcast you will learn: Why Estonia considers revoking the reduced CIT for regular dividends and other ‘unprecedented’ changes to the tax law? Which are those coming changes in the tax law? About the recent fuss in the media – why tax administration might want to have data from banks about aggregated amounts going through bank accounts of companies, and what is […]
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European Legal update: 14.05. – 28.05.
Assistant lawyer Nikola Cīparsone compiled the material. Energy A regulation on tracking and reducing methane emissions adopted by the Council Adopted: 27 May 2024 The Council has adopted a regulation on tracking and reducing methane emissions. It is part of the ‘Fit for 55’ package. The regulation introduces new requirements on measuring, reporting and verifying methane emissions in the energy sector. See also: Press release Banking and finance The EBA finds divergences in the issuance and regulation of ‘virtual IBANs’ across the EU, identifies issues, and provides recommendations on how to address them Issued: 24 May […]
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How will the insurance sector be affected by the new Defence Fund package?
On 21 May 2024, the Defence Fund package was presented in Lithuania, to bring Lithuania’s defence spending up to 3% of GDP. The proposal outlined how the defence budget will be increased; several are related to the insurance sector. According to the information available to us, the Lithuanian Government is planning to discuss and debate the proposed draft laws more extensively over the next few weeks, so the currently published drafts and ideas may still be subject to further modifications. However, according to the draft laws and other publicly available information, the insurance sector could be affected in the ways […]
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The Court condemns ‘cherry-picking’ of risks and benefits of the internal market for banking services
Case C-822/21, Latvia v. Sweden (deposit guarantee schemes) The Swedish banks, which have long considered the Baltics their ‘home market’, were quick to reap the benefits of the internal market by expanding across the borders. However, the global financial crisis revealed the downside of this expansion and promoted banks to consolidate their position. The institution of the Banking Union, by centralising the supervision and resolution of the banks at the EU level, also incentivised banking groups, such as Nordea Bank, to re-domicile their headquarters from Sweden to the Euro Area. This strategic decision allowed them to benefit from the same set […]
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Patria opens an armoured vehicle production facility in Latvia
We assisted Patria, a company owned by the Finnish and Norwegian states, an international provider of defence, security and aviation life-cycle support services, technology solutions and pilot training, in opening a new armoured vehicle production facility in Valmiera, Latvia. About project We have been a part of the project from the very beginning, and helped the client establish a joint venture, Defence Partnership Latvia. We also supported the client with various matters related to commencing operations on the part of the joint venture, which manages Patria’s Latvian production operations and facility. Furthermore, we provided all legal advice related directly to […]
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European Legal update: 30.04. – 14.05.
Assistant lawyer Natālija Ķīse compiled the material. Data protection Digital Markets Act: Commission initiates market investigation for X and designates Booking as gatekeeper Published: 13 May 2024 In accordance with the Digital Markets Act (DMA), the European Commission decided not to designate X Ads or TikTok Ads and instead named Booking as the gatekeeper for their online intermediation business, Booking.com. Additionally, in order to assess the rebuttal submitted in relation to the online social networking service X, the Commission has launched a market investigation. Press release. Commission opens formal proceedings against Facebook and Instagram under the Digital Services Act Initiated: […]
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Sorainen ESG-focused newsletter, May 2024
EU-level news ECTHR ruled that climate inaction violates human rights On 9 April 2024, the European Court of Human Rights handed down a groundbreaking ruling in a case concerning elderly Swiss women and climate change. This is a major decision, as it is the first time that the Court has dealt with climate change issues, setting an important legal precedent. The case highlights the complex link between climate change and fundamental human rights and underlines the urgent need for decisive action. Switzerland was found to have violated Article 8 of the European Convention on Human Rights (which guarantees the right […]
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AML Watcher: Can Spotify be used as a Money Laundering Front?
Violeta Zeppa-Priedite, head of Sorainen Latvia Corporate Crime practice has recently mentioned that the development of various social networks and online platforms has not only created new opportunities for people to consume and publish different types of content, but unfortunately has also opened up new horizons for criminals to engage in illegal activities. As the digital environment evolves, so do the innovative methods used by criminals seeking to launder the proceeds of crime. The forms and methods of money laundering are becoming more varied and, in a sense, more “creative”. Spotify has previously been criticized for allowing users to play […]
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En.lsm.lv: “Latvijas Gāze” dividends payment to Russian companies challenged in court
How correct is it that the Latvian gas company “Latvijas gāze” paid out several million euros in dividends to Russian state companies on its profits last summer? This question has been brought to court. Energy prices soared around the world after Russia’s full-scale invasion of Ukraine. This helped energy companies, including Latvijas gāze, to make good profits. Coupled with the company’s retained earnings from previous years, Latvijas gāze could pay out a significant sum to its shareholders – almost €110 million. Even two years after the outbreak of war, half of the company’s shares are owned by the Russian state energy giant […]
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European Legal update 17.04. – 30.04.
Assistant lawyer Natālija Ķīse compiled the material. Data protection Fashion online retailer, Shein, to comply with more stringent DSA rules Published: 26 April 2024 Shein, an online fashion store with over 45 million monthly visitors in the EU, has been officially classified as a Very Large Online Platform (VLOP) by the Commission today in accordance with the Digital Services Act (DSA). Shein will now be subject to the strictest regulations under the DSA, including the requirement to implement particular policies to empower and safeguard users, including minors, online and to appropriately identify and reduce any systemic risks resulting from […]
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Tax Stories Podcast – Episode 58 – Bernard Peeters
Bernard Peeters is a senior partner of the leading Belgium tax boutique Tiberghien, a member firm of WTS Global tax network. Listen to the podcast here! In this episode (no.58) you will learn about leadership principles, professional firm management and international tax topicalities. You will also discover about: what principles did Bernard Peeters and his colleagues apply to grow from ~20 tax lawyers in 1990s when he started to more than 120 tax lawyers now and to become Tier 1 tax boutique; what pricing principles to apply in order not to compromise on quality? the book Bernard recommends: The World is Flat by […]
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Effects of inflation on public procurement contracts: when can the contract price be increased?
The changes in prices and inflation observed in recent years have created a lot of uncertainty regarding signed and still ongoing contracts. This has led to questions being raised regarding specific public procurement contracts. Related legal disputes have already reached the highest courts of Lithuania. According to the courts, the law generally allows for an increase in the price of a public procurement contract, but certain criteria have to be met. It is important to remember that the grounds for changing the price of a public procurement contract are essentially embedded in two possible sources: the law or the contract […]
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Intellectual property audit: ensuring legal compliance and protection
Today, 26 April, we are celebrating the World Intellectual Property Day! This holiday emphasises the exceptional importance of protecting intellectual property (IP) rights, which are crucial for every business, as they provide a competitive advantage, prevent others from using or profiting from your innovations, and, moreover, allow you to monetise your intellectual assets through licensing or selling. This article aims to demonstrate how IP audits help businesses to evaluate, optimise and protect their intellectual assets, ensuring they are used and commercialised correctly. Introduction to IP audits An IP audit is a systematic review of a company’s IP assets to ensure legal […]
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Latvia Takes a Bold Leap: Embracing International Standards with the Arbitration Law Reform
Latvia’s status as the arbitration unicorn remains undisputed after nearly ten years since adopting the country’s first Arbitration Law (“Latvian Arbitration Law”). In February 2024, the overly liberal Latvian regime resulted in 57 arbitral institutions. This record-high number, however, is considerably less than the 214 arbitral institutions in Latvia in 2013. Although advertised by the Latvian government to follow the UNCITRAL Model Law on International Commercial Arbitration, the Latvian regime was claimed to be the last of the 46 member states of the Council of Europe to not provide for setting aside proceedings for arbitral awards. Following the Constitutional Court’s judgment of 23 February 2023 that the […]
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New EU tax initiatives: January–April 2024
Our Tax expert team has prepared an overview of the most relevant aspects of the latest European Union tax initiatives. Read more on the following topics to discover how these initiatives are relevant to your company. HOT Directive: SMEs gain the opportunity to use head office taxation rules for calculating taxes At the beginning of autumn 2023, the European Commission published a new legislative proposal, a Council Directive establishing a Head Office Tax (HOT) system for micro, small and medium-sized enterprises (SMEs) and amending Directive 2011/16/EU (the HOT Directive). The HOT Directive introduces rules that allow SMEs operating across different European Union (EU) countries […]
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Belarusian government introduces restrictions on payment of dividends to foreign shareholders
Starting from 24 April 2024, investors from certain countries* (Affected Shareholders) will face restrictions when trying to receive dividends from their Belarusian subsidiaries. The details of the new restrictions are set out in Resolution of the Council of Ministers No. 299 (available in Russian) dated 19 April 2024 “On Application of a Special Restrictive Measure” (the Resolution). According to the Resolution, the restrictions on payment of dividends will comprise the following measures: limitation of the maximum amount of dividends that may be freely paid to Affected Shareholders requirement to obtain a permit from the local executive committee in order to pay dividends exceeding this limit in […]
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News on filing annual reports and other issues
Deadline for filing annual reports with the State Revenue Service (SRS) approaching The Law on Annual Financial Statements and Consolidated Financial Statements requires all companies to file an annual report approved by the shareholders’ meeting with the SRS, no later than one month after approval by observing the deadline that is set based on the criteria applicable to the companies: micro and small companies must file an approved annual report for the year 2023 to the SRS no later than five months after the end of the reporting year. This means that if a company’s reporting year is the same […]
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Life Sciences & Healthcare newsletter, April 2024
This month’s Life Sciences & Healthcare newsletter focuses on the distance selling of medicinal products. In February, the Court of Justice of the European Union made a fundamental decision concerning the legality of distance selling of over-the-counter (OTC) medicinal products. At the same time, in all of the Baltic States the possibilities under the brand “MyHealth@EU” are growing. Decision of the Court of Justice of the European Union on distance selling of medicinal products On 29 February 2024, the Court of Justice of the European Union clarified situations when a member state can require from the entity that participates in […]
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New report – Independent production and retention of intellectual property rights
The European Audiovisual Observatory publishes a new in-depth analysis of the national definitions of independent production in Europe and the frameworks governing copyright retention by independent producers. The study has been co-financed by the European Commission under Creative Europe. The data used in the report was provided by a pan-European team of national experts and has been cross-checked with the national regulatory authority in each respective territory covered. The Latvian submission was provided by Ieva Andersone, partner and head of the competition and regulatory team and Lūcija Strauta, assistant lawyer at Sorainen. National approaches to defining independent producers What are […]
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European Legal update 01.04. – 16.04.
Assistant lawyer Natālija Ķīse compiled the material. ESG ECtHR delivers three Grand Chamber rulings in cases concerning climate change Issued: 9 April 2024 The European Court of Human Rights issued rulings in three climate change-related cases, emphasising the relationship between environmental issues and human rights. Verein KlimaSeniorinnen Schweiz and Others v. Switzerland, Carême v. France, and Duarte Agostinho and Others v. Portugal and 32 Others are three lawsuits that deal with complaints about nations’ inadequate efforts to mitigate the consequences of climate change on people. Energy Performance of Buildings Directive adopted to bring down energy bills and reduce […]
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Prohibition of re-exporting goods to Russia
Pursuant to the amendments to the European Union (EU) Regulation No. 833/2014, concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine (the Regulation) adopted on 18 December 2023, as of 20 March 2024 exporters of various categories of goods are obliged to include in their purchase or supply contracts a clause which prohibits a recipient/importer from a third country from further re-exporting (transferring) these goods to Russia or for use in Russia. The aim of these amendments is to combat the circumvention of EU sectoral sanctions, in cases where goods that are subject to sanctions are […]
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The AI Act is here – the time to act is now
The AI Act is a comprehensive legislative framework designed to govern the development, deployment and use of artificial intelligence (AI) systems within the European Union, with the aim of ensuring safety, transparency and respect for fundamental rights. On 13 March 2024, the European Parliament adopted the consolidated AI Act. The next step before the Act can be enacted and officially published in The Official Journal of the European Union involves its formal adoption by the EU Council. The AI Act also prohibits the use of certain AI systems and under the current timeline, this ban is set to become applicable […]
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Sorainen ESG-focused newsletter, April 2024
Legislative news and ESG initiatives in Estonia, Latvia, Lithuania Status of the Corporate Sustainability Reporting Directive’s transposition into local laws Lithuania Following the draft CSRD transposition package that was published at the end November 2023, now the proposal has been adjusted and a new version was put forward in March 2024. There are no substantial changes in this revised draft package that would materially impact companies now preparing for the disclosure of sustainability information. According to the schedule of the sittings of the Parliament of the Republic of Lithuania, the issue of transposing the CSRD into Lithuanian law will be […]
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European Legal update 20.03. – 01.04.
Assistant lawyer Nikola Cīparsone compiled the material. Technology, media & telecommunications Commission and the research community develop guidelines on responsible use of generative Artificial Intelligence in research Official press release: 20 March 2024 The Commission and the European Research Area countries and stakeholders have jointly put forward a set of guidelines to support the European research community in their responsible use of generative Artificial Intelligence. Council adopts new rules to protect journalists and media providers Official press release: 25 March 2024 The Council has adopted a new law that will safeguard media freedom, media pluralism and […]
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Fintech Day 2024 – Akvile Jurkaityte, Fintech Associate at Sorainen
At Fintech Day 2024, Akvile Jurkaityte, Fintech Associate at Sorainen, gathered her insights and impressions of the event for the Nordic Fintech Magazine. Akvile highlighted the remarkable growth of the event compared to the previous year, emphasizing the diversity of topics covered, ranging from sustainability to artificial intelligence and payments. She expressed enthusiasm for the collaborations between fintechs and banks, noting the increasing integration of advanced technologies like AI and blockchain into financial services. Read the full article here.
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European Legal update 05.03. – 19.03.
Assistant lawyer Natālija Ķīse compiled the material. Data protection Commission opens formal proceedings against AliExpress under the Digital Services Act Official press release: 14 March 2024 The Commission has initiated formal procedures to evaluate whether AliExpress violated the Digital Services Act (DSA) in relation to risk management and mitigation, content moderation, internal complaint handling, advertising and recommender system transparency, trader traceability, and researcher data access. European Commission’s use of Microsoft 365 infringes data protection law for EU institutions and bodies Official press release: 11 March 2024 According to the EDPS, the Commission violated multiple sections of Regulation (EU) […]
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Tax Stories Podcast – Episode 55 – Thomas Hoppe
Thomas Hoppe is a head of indirect taxation at Schwarz Group (Lidl/Kaufland). He is a co-host of TaxPunk podcast where he talks about makers and users of tax tech tools. Listen to the podcast here! In the podcast we discussed: triathlon; the book recommendation – Taxtopia by an anonymous Rebel Accountant; TaxPunk video-podcast (in German) – with people who do and use tax tech; TaxPunk.de – tax IT tools data base (300+ tax IT solutions listed, mostly related to VAT and other taxes, but also regarding, e.g., audit management); what technologies tax authorities are using; beer tasting and its link to characterisation of the podcast […]
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European Legal update 20.02. – 05.03.
Assistant lawyer Nikola Cīparsone compiled the material. ESG Directive empowering consumers for the green transition and circular economy Adopted: 20 February 2024 The Council has adopted a directive aimed at empowering consumers to facilitate the shift towards sustainability. This new directive seeks to strengthen consumer rights by amending the unfair commercial practices directive (UCPD) and the consumer rights directive (CRD), tailoring them to the principles of green transition and circular economy. See also: Press release. Zalando commits to provide clearer information for consumer following EU action Press release: 22 February 2024 Zalando has committed to removing misleading sustainability flags and […]
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Sorainen ESG-focused newsletter, March 2024
Legislative news and ESG initiatives in Estonia, Latvia, Lithuania Status of the corporate sustainability reporting directive’s transposition into local laws In Estonia, the draft law transposing the CSRD was published on 23 February 2024 and is currently waiting for approval from ministries. It is expected to come into force on 6 July 2024. The draft law proposes changes to three main laws – the Accounting Act, the Auditors Activities Act and the Securities Market Act – and some associated regulations. The draft also amends the size criteria for undertakings. According to the impact assessment, the number of undertakings affected by […]
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Tax Stories Podcast – Episode 54 – Philip Baker
Philip Baker is a barrister (37 y), King’s Counsel, lecturer at the University of Oxford, LLM, PhD, MBA, an author of a book on Double Taxation Conventions “A guru on treaty and and cross-border tax”. Listen to the podcast here! In the podcast we discussed: his Order of the British Empire – for helping political refugees from China in the UK; his love to his family, sinology (the study of Chinese law, language, history, customs, and politics) and Arsenal; that there are already three generations of tax experts in his family – his father, himself and his son; his Latvian roots […]
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Group insurance contracts – still an attractive structure for business models?
Group (or “affinity”) insurance models are well-known and widely used in the Lithuanian insurance market. They are particularly popular in the case of travel insurance, payment protection insurance and purchase protection insurance products offered by banks along with credit cards. Group insurance contracts are also commonly used for personal accident and health insurance, which employers typically provide to their employees as an additional benefit package. Practically any insurance product can be distributed under group insurance models, as insurable interest is justified. There are various reasons for the popularity of group insurance models. On the one hand, insurance models of this […]
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Tax Stories Podcast – Episode 53 – Błażej Kuźniacki
Błażej Kuźniacki is a professor at Lazarski University in POL, works for PWC in NED, is an author of a book ‘Beneficial Ownership in International Taxation” and countless publications. Listen to the podcast here! In the podcast we discussed: his favourite destinations in the world, book recommendations (incl. Man’s Search For Meaning by Viktor E Frankl and The ONE Thing by Gary Keller) and hobbies, incl. singing rap in this song, some 14 years ago; how it is possible to combine both tax practice (policy and disputes) and academic research; tax policy vs law; Pillar 2 and offshores; arbitration for resolving tax disputes – the benefits of […]