Sorainen Secures Thin-Capitalization Exemption Ruling for Digmatix

"Sorainen represented Digmatix in obtaining a positive advance ruling from the Latvian tax authorities, confirming that the thin-capitalization exemption applies to interest paid to an investment fund established in another EU member state. The ruling addresses prior restrictive practice, aligns tax treatment of EU fund loans with bank lending, and broadens financing options for Latvian startups and growth companies."

Sorainen represented Digmatix in obtaining a positive advance ruling from the Latvian tax authorities confirming that the thin-capitalization exemption applies to interest payments made to an investment fund established in another EU member state. The matter addressed a previously restrictive administrative stance and involved issues including the interplay between Latvia’s thin-capitalization regime and the financial supervision of externally managed funds. It also considered the compatibility of prior practice with the EU freedom to provide services and with EU State aid rules. The ruling places loans provided by investment funds established in other EU member states on an equal tax footing with bank lending. By clarifying that interest payments to such funds qualify for the thin-capitalization exemption, the decision broadens financing options for Latvian businesses and supports the development of the local capital market as an alternative source of funding for startups and growth companies. Sorainen represented client(s) Digmatix with a team composed by: Partner Aija Lasmane; Of Counsel Martins Rudzitis.

Sorainen Secures Thin-Capitalization Exemption Ruling for Digmatix

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