U.S. Tax Reforms: How Global Changes Will Impact Latvia
U.S. Tax Reforms: How Global Changes Will Impact Latvia
U.S. Tax Reforms: How Global Changes Will Impact Latvia
Although the United States may seem far removed from Latvia, the country’s recent tax reform will likely have a ripple effect across the globe — including Europe and Latvia. These reforms touch on a wide range of areas, from corporate income and sales taxes to incentives for research, innovation, and even personal income tax relief.
In an in-depth interview with Dienas Bizness, Jānis Zelmenis, Partner at BDO Latvia, explains how the U.S. tax overhaul — driven by President Donald Trump’s return to office — may affect international competition and reshape the way countries like Latvia structure their fiscal policies.
Key highlights from the U.S. reforms include:
🔹 A unified 21% federal corporate income tax rate across the country,
🔹 100% bonus depreciation for qualifying manufacturing properties,
🔹 Significant personal income tax relief for middle-income earners,
🔹 Elimination of tax credits for electric vehicles and green energy sectors,
🔹 New restrictions on charitable donations and a 1% tax on cash transfers.
The clear goal behind these reforms is to boost U.S. global competitiveness, retain capital within national borders, and reinforce domestic economic power. However, such measures inevitably impact European manufacturers and exporters, who may find it harder to compete in the global market — especially in the face of increasing tariffs and regulatory divergence.
This raises critical questions for Latvia:
How can we remain competitive in such a rapidly shifting global landscape?
Should we reassess our own tax system and incentives to support economic growth and protect local businesses?
📌 Originally published in the newspaper “Dienas Bizness” on August 5, 2025
Author: Māris Ķirsons
Interviewee: Jānis Zelmenis, Partner at BDO Latvia and tax expert