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Last checked: 24/02/2020

Income taxes abroad – Latvia

Affected by Brexit?

I am an employee

What income will be taxed in Latvia?

  • Are you a Latvian resident for tax purposes? If so, you must pay tax on the income you earn abroad in Latvia

    (the criterion for Latvian tax residency is to be registered as living in Latvia for at least 183 consecutive days over a 12-month period).
  • Do you live in Latvia, but spend less than 183 consecutive days there over a 12-month period? In that case, you are not considered a resident in Latvia for tax purposes and are obliged to pay tax to Latvia only on the income you have earned there.
  • Have you earned any income in any other EU Member State? Check to make sure that you do not pay tax on the same income twice.
  • A person who is living abroad but whose declared place of residence is in Latvia is still a resident of Latvia.

How much tax will you have to pay?

Individuals pay a fixed rate of 23 %.

The following are taken into account:

  • tax breaks;
  • the tax deductions you are entitled to for certain types of expenditure.

The tax rate on annual taxable income is as follows:

  • 20% — on annual income up to EUR 20,004;
  • 23% — on the share of annual income over EUR 20,004, but not more than the maximum amount of the basis for compulsory contributions, as laid down in the Law on State social insurance;
  • 31,4% — on the share of annual income exceeding the maximum amount of the basis for compulsory contributions, as laid down in the Law on State social insurance (EUR 62,800 in 2020);

When and how do you have to pay?

Your employer deducts income tax and social security contributions from your salary. If you have no other source of income, you do not have to file an annual tax return.

If you nevertheless wish to do so, you must file your return between 1 March and 1 June.

The progressive tax rate and projected income-differentiated basic allowance mean that people in salaried employment may also be required to file an annual income tax return.

How to file a complaint

If you disagree with your tax assessment, you can appeal to the tax inspectorate . Read the letter notifying you of your tax assessment carefully. It will specify exactly which department you should send your appeal to and what procedures should be followed.

Links

Latvian Ministry of Finance

Latvian State Revenue Service

Refunding of excess VATlv

 

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