{"id":29337,"date":"2022-05-06T10:21:02","date_gmt":"2022-05-06T08:21:02","guid":{"rendered":"https:\/\/www.thompsonstein.com\/?p=29337"},"modified":"2026-01-29T14:50:30","modified_gmt":"2026-01-29T13:50:30","slug":"how-is-the-tax-system-in-latvia-everything-you-need-to-know","status":"publish","type":"post","link":"https:\/\/www.thompsonstein.com\/en\/how-is-the-tax-system-in-latvia-everything-you-need-to-know\/","title":{"rendered":"How is the tax system in Latvia? – everything you need to know"},"content":{"rendered":"

Latvia – as one of the European Union countries, offers efficient and electronic business registration for all member states. Its favorable tax system attracts foreign investors, who can take advantage of the conducive CIT and VAT rates applicable there.<\/strong><\/p>\n

Small and medium-sized entrepreneurs most often choose to establish a limited liability company SIA (Sabiedriba ar ierobezotu atbildibu \/ Latvian Limited Liability Company). This is the most advantageous legal form for foreign entrepreneurs, as the optimal tax system in Latvia allows them to reduce their tax liability.<\/p>\n

Taxation system in Latvia \u2013\u00a0Corporate Income Tax<\/strong><\/h2>\n

Latvia’s business-friendly tax system is based on a competitive EU corporate income tax (CIT) rate of 15%. It is crucial that the income tax in Latvia is only payable when profits are distributed. This enables the entrepreneurs to manage Latvian company<\/a>\u00a0 assets more efficiently, as well as encourages long-term investment. The tax system in Latvia also includes CIT exemption for income from capital gains.<\/p>\n

Taxation system in Latvia \u2013 Personal Income Tax, Dividend Tax<\/strong><\/h2>\n

The personal income tax (PIT) rate in Latvia is progressive, depending on the income received. Based on current revenue limits, it is as follows:<\/p>\n