Latvian Tax Rates
Companies are taxed at 15% and capital gains are usually taxed at the same rate. Depreciation, dividends, trade with subsidiaries, and income from property sales or rentals are generally tax-deductible. Since 1 January 2013, Latvia has had a tax rate of 0% on holding companies, i.e. on subsidiaries’ profits.
VAT is 22%, with reduced rates of 10% for foodstuffs, medicines, medical equipment, water, books and newspapers, hotels, etc and some full exemptions.
Personal income tax in Latvia is taxed at the following rate irrespective of amount:
|26% of salaries||10% on capital||15% on capital gains|
The following income is not subject to tax: income from investments in retirement pension funds, insurance claims and income from the sale of personal assets.
Latvian Tax Authority
Accounting Requirements in Latvia
Latvian accounting is subject to the IFRS’s European regulations. By default the fiscal year runs from 1 January to 31 December though companies may elect for a different twelve-month period. Accounts must be published in Latvian (or, in some cases, in an approved second language for foreign companies).
Accounting documents must be maintained in Latvia and must comprise a balance sheet, a profit and loss account, an appendix and a management report. Accounts must be audited if the company has capital of more than EUR 356 000 and/or a turnover of over 711 000 EUR, and/or if the number of employees exceeds 25.