Latvia: Personal Taxation

On this Page:

- LATVIA RESIDENCE AND LIABILITY FOR TAXATION
- LATVIA RATES OF INCOME TAX
- LATVIA SOCIAL SECURITY TAXES
- LATVIA PROPERTY TAXES
- LATVIA INHERITANCE AND GIFT TAXES

Latvia Residence and Liability for Taxation

An individual is resident if their permanent place of residence is in Latvia, or if they spend more than 183 days in Latvia during the tax year.

Resident individuals are taxed on their worldwide income. Non-residents are taxed on income originating in Latvia, generally on the same principles as resident individuals.

Latvia Rates of Income Tax

A rate of 26% applies on all income after deductions and allowances have been taken into account. The individual personal allowance is LVL35 per month, plus LVL63 per month for each child and certain dependants of the taxpayer.

Self-employed individuals meeting certain conditions and carrying out a nominated economic activities such as footwear/clothing production, photography, housekeeping etc. can elect to pay a monthly license fee. The fee ranges between LVL30 to LVL120, depending on the type of activity. The fee includes personal income tax and social security contributions.

Dividend income is taxed at 10%, capital gains at 15%.

Latvian nationals regarded by the authorities as living in jurisdictions listed as “tax preferential” countries are subject to a 15% withholding tax on any income arising in Latvia.

Foreign tax credits are available up to the level of tax that would have been payable in Latvia on the income concerned.

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Latvia Social Security Taxes

Both employers and employees pay social security contributions. The employee pays 9% of gross salary; the employer pays 24.09% of the employee’s gross salary. There is no upper limit above which such payments are exempt; a previous limit was removed on January 1, 2009 until December 31, 2013.

Self-employed persons pay a total of 30.48% of their taxable earnings.

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Latvia Property Taxes

There is an annual real estate tax on immovable property of 1.5% of the cadastral value of buildings and land; an additional municipal tax of up to 0.6% of the cadastral value may also be charged.

Disposal of real estate is subject to stamp duty of 2% on either the cadastral value or the sale price, whichever is the highest, but subject to a maximum charge of LVL30,000.

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Latvia Inheritance and Gift Taxes

There is no inheritance or gift tax in Latvia.

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