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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.
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- 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
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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 may be offset 8 years forward. It is not possible to offset a loss from previous years, Companies that operate in a free economic zone may offset losses 10 years forward.
- Consolidated statements - in Latvia consolidated returns are not allowed. Yet, under certain terms a loss in one company of a group ma 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
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Research and development expenses may be deducted entirely in the year of purchase
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