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Latvia Tax Deductions













All form of relief relates to the income of an individual who is a Latvian resident.
The following amounts are subject to the definition and ceilings in Latvian law:


Personal Relief Comments
  • Personal deduction for a resident.
  • Deduction for a dependant relative.
  • Payments to an education authority and national insurance.
  • Payments to an independent pension fund.
  • Donations.
  • LVL 45 a month
  • LVL 70 a month.
  • LVL 150 a month per person per annum and a similar amount for a dependant relative.
  • Up to 10% of income, subject to the ceiling



Latvia Business Deductions

In Latvia, in addition to the deductions/credits mentioned above, deductions and business expenses may be claimed as specified below:

  • Offset of losses: - A loss incurred from 2008 onwards may be offset forward indefinitely. It is not possible to offset a loss from previous years.
  • Consolidated statements - in Latvia consolidated returns are not allowed. Yet, under certain terms a loss in one company of a group may be set against a profit in another company in the group.
  • Financing expenses - interest on credit is allowable for tax. Nevertheless, the interest is not deductible if the debt to equity ratio is more than 4:1.
  • Employer's voluntary contributions to pension and health funds are allowable to an amount of LVL 40 per employee per month.


Latvia Depreciation of Fixed Assets

  • The "double-declining balance" is the method of depreciation adopted in Latvia.
  • The rates of depreciation in Latvia:
    Class of Asset % Depreciation
    Buildings and equipment 10
    Computers and peripheral equipment 70
    Road infrastructure and transport vehicles 20
    Vehicles and ships 30
    Patents 20 (straight line method)
    Oil drilling equipment 15
  • Research and development expenses may be deducted entirely in the year of purchase







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