MAE – SEDE – 65 – P – 0533059

P LVA 3B

Roma, 9 dic.2004

VERBAL NOTE

The Ministry of Foreign Affairs presents its compliments to the Embassy of the Republic of Latvia in Italy and, with reference to the Convention between the Government of the Italian Republic and the Government of the Republic of Latvia for the avoidance of double taxation with respect to taxes on income and on capital and the prevention of fiscal evasion, signed at Riga on the 21^st of May, 1997, has the honour to propose as follows.

Under the Article 2 of the above-mentioned Convention, the taxes covered include, in the case of Italy, the net worth tax on enterprises. Considering that the above tax does not exist any more in the Italian legal system, since it has been abolished by Legislative Decree No. 446 of 15.12.1997, with effect from 1.1.1998, we have the honour to propose, on behalf of the Government of the Italian Republic, that the net worth tax on enterprises is deleted from the list provided for by Article 2, paragraph 3, letter b) (iii) of this Convention.

Furthermore, considering that this Convention also applies to taxes on capital and that the abolition of the above-mentioned tax means that the taxes on capital are no more imposed in Italy, with reference to the methods for the elimination of double taxation as provided for in Article 25, what stated above shall be taken into account by including a new letter a) in the Protocol to the Convention which reads as follows:

“a) with reference to Article 2, paragraph 3, letter b) (iii), where a tax on capital is introduced in Italy, this Convention shall apply to such tax and double taxation shall be avoided in accordance with the provisions of Article 25 of the Convention;”.

Consequently the other letters of the Protocol shall be renamed.

If the foregoing proposal is acceptable to the Government of the Republic of Latvia, the Ministry of Foreign Affairs has the honour to propose that the present Verbal Note and Verbal Note’s reply of the Embassy of the Republic of Latvia in Italy shall be regarded as constituting an Agreement between the two Governments, which shall enter into force on the same date of the Convention signed on the 21^st of May, 1997 and shall remain in force as long as this Convention is in force.

The Ministry of Foreign Affairs avails itself of this opportunity to renew to the Embassy of the Republic of Latvia in Italy the assurance of his highest consideration.

_____________________________________

Ambasciata della Repubblica di Lettonia

Viale Liegi, 42

00198 R O M A

Nr.2.3.6.-668

NOTE VERBALE

The Embassy of the Republic of Latvia in Italy has the honour to acknowledge receipt of the Italian Verbal Note n. 0533059 dated 9.12.2004, which reads as follows:

“The Ministry of Foreign Affairs presents its compliments to the Embassy of the Republic of Latvia in Italy and, with reference to the Convention between the Government of the Italian Republic and the Government of the Republic of Latvia for the avoidance of double taxation with respect to taxes on income and on capital and the prevention of fiscal evasion, signed at Riga on the 21^st of May, 1997, has the honour to propose as follows.

Under the Article 2 of the above-mentioned Convention, the taxes covered include, in the case of Italy, the net worth tax on enterprises. Considering that the above tax does not exist any more in the Italian legal system, since it has been abolished by Legislative Decree No. 446 of 15.12.1997, with effect from 1.1.1998, we have the honour to propose, on behalf of the Government of the Italian Republic, that the net worth tax on enterprises is deleted from the list provided for by Article 2, paragraph 3, letter b) (iii) of this Convention.

Furthermore, considering that this Convention also applies to taxes on capital and that the abolition of the above-mentioned tax means that the taxes on capital are no more imposed in Italy, with reference to the methods for the elimination of double taxation as provided for in Article 25, what stated above shall be taken into account by including a new letter a) in the Protocol to the Convention which reads as follows:

“a) with reference to Article 2, paragraph 3, letter b) (iii), where a tax on capital is introduced in Italy, this Convention shall apply to such tax and double taxation shall be avoided in accordance with the provisions of Article 25 of the Convention;”.

Consequently the other letters of the Protocol shall be renamed.

If the foregoing proposal is acceptable to the Government of the Republic of Latvia, the Ministry of Foreign Affairs has the honour to propose that the present Verbal Note and Verbal Note’s reply of the Embassy of the Republic of Latvia in Italy shall be regarded as constituting an Agreement between the two Governments, which shall enter into force on the same date of the Convention signed on the 21^st of May, 1997 and shall remain in force as long as this Convention is in force.

The Ministry of Foreign Affairs avails itself of this opportunity to renew to the Embassy of the Republic of Latvia in Italy the assurance of his highest consideration.”

The Embassy of the Republic of Latvia in Italy has the honour to inform the Minis­try of Foreign Affairs of the Italian Republic that the Government of the Republic of Latvia is in agreement with the content of the above-mentioned Note.

The Embassy of the Republic of Latvia in Italy avails itself of this opportunity to renew to the Ministry of Foreign Affairs of the Italian Republic the assurance of his highest consideration.

Rome, 9 December 2004

__________________________

Ministry of Foreign Affairs

of the Italian Republic

Rome