Latvia changes in taxation from 2023January 2023
General rate of compulsory state social security contributions - 34.09%
Employer's rate - 23.59%
Employee’s rate - 10.5%
Personal income tax (PIT) rates: For income up to 20,004 euro per year - 20%
for income between 20,004 and 78,100 euro per year - 23%
for income above 78,100 euro per year - 31%
Latvia Tax Heaven ListJanuary 2018
Starting January 1, 2018 there is an updated list of 25 jurisdictions included in the Latvian tax heaven list.
The Latvian tax law imposes higher tax withholding rates for payment to those included in the tax heaven list.
Latvia V.A.T. UpdateDecember 2017
Starting January 1, 2018 the threshold for V.A.T. registration will be lowered from current EUR 50,000 to EUR 40,000.
Latvia Qatar Tax TreatyJuly 2015
The double tax treaty, DTA, between the two countries entered into force on June 1, 2015 applying from January 1, 2016.
The tax withholding rates according to the DTA are 5% for dividends and interest paid to recipients other than companies.
The withholding rate for payment to companies is zero.
The tax withholding rate for payment of royalties is 5%.
Latvia Tax CutsJune 2012
The Latvian parliament approved on May 24, 2012 certain tax cuts.
Starting July 1, 2012 the standard VAT rate will be reduced from the current 22% rate to 21%.
The personal income tax rate will be reduced in the next three years from the current 25% rate to 24% in 2013, 22% in 2014 and 20% in 2015.
Latvia New Tax Withholding RulesMarch 2012
Starting 1.1.2013 payment of dividend to non-resident companies will be tax exempt in most cases.
The exemption will also apply to payments of interest and royalties starting 1.1.2014.
Latvia V.A.T IncreaseJanuary 2011
Starting January 1, 2011 the standard Latvian V.A.T rate increased by one per cent to 22%, replacing the previous 21% rate. The reduced V.A.T rate increased by two per cent from the previous 10% rate to 12%.
Latvia Tax Rates 2009January 2009
From 1.1.2009 the new standard V.A.T rate in Latvia is 21%, compared to 18% in 2008.
The reduced V.A.T rate for 2009 is 10%, instead of the 5% rate in 2008.
The increase in the V.A.T rates follows EU pressure to increase taxes, a precondition for granting a loan to Latvia.
The reduced V.A.T rate relates inter alia to medicines and public transport.
Certain goods and services which were subject to a reduced rate in 2008 are now subject to the standard 21% rate.
The list includes hotel services, books and water supply services.
In 2009 the new personal income tax rate is reduced to 23%, replacing the previous 25% rate.
There are also additional tax credits to disabled people.
From 1.2.2009 there are new amendments relating to excise tax on petrolium products, alcoholic and non alcoholic drinks.
Latvia Tax Rates 2008February 2008
In 2008 the flat income tax rate for individuals is 25%, 15% for income from self employment.
The corporate income tax rate is 15%.
The standard VAT rate in Latvia is 18%. There is also a reduced rate of 5%.
Latvia Income Tax 2006January 2006
From 1.1.2006 the monthly personal free allowance is LVL 32, the monthly deduction for a dependant relative is LVL 22.
Latvia Tax 2004July 2004
The government decided to reduce Latvia corporate income tax rate to 12.5%, as in Ireland.
The new rate is due by July 2006.
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