Latvia: Personal Taxation
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.