Tax Guide

Latvia corporate taxes

Latvia taxes company profits only when they leave the business: reinvested profit is taxed at 0%, and 20% corporate income tax falls due on distribution. VAT is 21%, payroll runs on a two-rate progressive personal income tax, and structured e-invoicing is mandatory for the public sector from 2026 (B2B from 2028). Filing is electronic through the State Revenue Service EDS portal.

Currency EUR (€)Tax year Calendar yearEU member stateLast reviewed 2026-07-12
20%
Corporate income tax
0% on retained profit · ~25% on net distribution
21%
VAT standard rate
Reduced: 12% and 5%
0%
Dividend WHT
Profit taxed at company level on distribution
25.5–33%
PIT on salary
+3% surcharge above €200,000
10.5%
Payroll — employee
Social insurance (VSAOI)
23.59%
Payroll — employer
Social insurance (VSAOI)
25%
Micro-enterprise tax
On turnover, alternative regime

Company forms & registration

Companies register with the Enterprise Register (UR); tax and VAT registration is with the State Revenue Service (VID). Almost all filing is electronic through the VID EDS portal.

Main legal formsSIA (private LLC), AS (public LLC), IK (individual merchant), IU (sole proprietorship)[6][15]SIA is the default choice for most businesses.
Minimum share capital — SIA€2,800 (standard) or €1–2,799 (low-capital SIA)[6][15]A low-capital SIA may be formed only by natural persons (up to five) and must build a mandatory reserve of ≥25% of annual net profit. AS: €35,000.
Registers a new employer meetsUR (incorporation, beneficial owners) → VID (taxes, VAT, EDS) → employees reported to VID before work starts[15][9]

Other statutory requirements

Obligations beyond filing a tax return that every operating company must satisfy.

Board member deemed salaryIf turnover exists but no one is paid at least the minimum wage, a board member is deemed to earn it[4][11]When monthly turnover exceeds five minimum wages and no employee or board member is paid at least the minimum wage (€780 in 2026), social contributions and PIT fall due on a deemed minimum-wage income for a board member.
Beneficial ownersBeneficial owner data filed with the Enterprise Register[15]Declared at incorporation and kept current; changes must be registered promptly.
Cash payment limitsDeclare cash deals ≥ €1,500; cash transactions above €7,200 are prohibited[8]Thresholds under the Law on Taxes and Fees; the prohibition applies to economic operators.
BookkeepingDouble-entry accounting; annual report under the Annual Reports Law[5]Accounting records retained 5 years (10 years for some documents).

Corporate income tax (uzņēmumu ienākuma nodoklis)

Since 2018 Latvia taxes distributed profit only. Retained and reinvested profit is taxed at 0%; tax arises when profit is paid out or deemed distributed.

Rate on distributed profit20% (≈25% of the net amount)[1][9]The base is grossed up by dividing the net distribution by 0.8, so the effective burden is about 25% of the amount paid out.
Retained profit0%[1]No tax while profit stays in the company; reinvestment is untaxed.
Alternative regime (2026)15% CIT + 6% PIT on dividends, for companies owned by individuals[1][14]New from 2026: an optional regime where distributable profit is grossed up by 0.85 and taxed at 15%, with 6% PIT withheld on the dividend paid.
Return & paymentMonthly via EDS when a tax base arises; paid by the 23rd of the following month[1][9]A return is always required for the last month of the financial year. Some taxpayers use a quarterly period.

Withholding taxes & dividends

Dividends, interest, royalties (non-residents)Generally 0%[1]No withholding in most cases, because profit is taxed at company level on distribution. Exception: 20% on payments to low-tax or blacklisted jurisdictions.
Management & consulting fees20%[1]Withheld on fees paid to non-residents; EU/treaty residents may instead be taxed on net profit with proof of expenses.
Real estate disposal3% of the price (or tax on the net gain)[1]On disposal of Latvian real estate (or shares in real-estate-rich companies) by a non-resident.
Treaty reliefExemption/reduction with a residence certificate[1]

VAT (pievienotās vērtības nodoklis)

Standard rate21%[2][10]
Reduced rate — 12%Medicines & medical devices, heating, public transport, hotels[2][10]A 12% rate on certain fresh foods applies under a pilot from 2026-07-01.
Reduced rate — 5%Books, press, baby food, certain fresh fruit & vegetables[2][10]0% applies to exports and intra-EU supplies.
Registration threshold€50,000 turnover in any 12 months[2][10]Register with VID within 15 days of crossing the threshold.
VAT returnMonthly, by the 20th of the following month[2][10]Payment by the 23rd. Includes the EU sales list where relevant.

Payroll: PIT & social insurance

The employer withholds personal income tax and social contributions and reports monthly to VID.

Personal income tax (IIN)25.5% / 33%[3][11]25.5% on annual income up to €105,300, 33% above. An extra 3% surcharge applies to income above €200,000.
Tax-free minimum€550/month (€6,600/year)[3][11]A fixed non-taxable minimum for all residents in 2026 (no longer income-differentiated).
Employee social insurance10.5%[4][11]Withheld by the employer (general rate for an employee insured for all risks).
Employer social insurance23.59%[4][11]Combined employee + employer rate 34.09%. A small business-risk fee is added.
Contribution ceiling & solidarity taxCeiling €105,300/year; solidarity tax above it[4][11]Contributions above the annual ceiling are recharacterised as solidarity tax at the same rates.
Minimum wage€780/month (2026)[14]
Employer reportingEmployer’s report (Darba devēja ziņojums) monthly via EDS[11][4]Reports wages, PIT and social contributions; contributions paid by the assigned monthly date.

Other taxes companies meet

Micro-enterprise tax25% of turnover[7][12]Optional regime for businesses with turnover under €40,000 and up to 5 employees; replaces PIT and social contributions on the owner’s business income.
Real estate tax0.2%–3% of cadastral value, set by municipalities[13]Buildings are typically 0.2–0.6%; land is commonly 1.5%.
Company & vehicle taxesCompany light-vehicle tax (UVTN) and vehicle operation tax[14]On company-owned passenger vehicles, by engine capacity/age; amendments effective 2026-01-01.
Natural resources taxOn extraction, pollution and packaging[9]Applies to users of natural resources and producers/importers of packaged goods.

Accounting & financial statements

Annual report filingVia VID EDS within 4 months of year end (small companies); 7 months for larger[5][9]April 30 for small calendar-year companies; up to July 31 for medium and large companies.
Statutory audit2 of 3 exceeded: assets €800,000, turnover €1,600,000, 50 employees[5]Smaller companies may need a limited review by a sworn auditor instead of a full audit.
E-invoicingMandatory for B2G from 2026; B2B from 2028[16][14]Structured e-invoices with reporting to VID, in PEPPOL BIS 3.0 / UBL 2.1 (EN 16931). Public-sector invoicing is mandatory from 2026-01-01; domestic B2B from 2028-01-01.
Document retention5 years (10 for some documents)[5]

Forms & filings

Every recurring return and report a typical company deals with, what triggers it, and where it goes. Registration-time and one-off filings are marked “per event”.

FormWhat it isWho filesFrequencyDeadlineFiled with
UINCorporate income tax return[1][9]CIT payers with a taxable eventmonthly20th of the following month; pay by the 23rdVIDEDS
PVNVAT return[2][10]VAT-registered personsmonthly20th of the following month; pay by the 23rdVIDEDS
DDZEmployer’s report (payroll taxes)[11][4]All employersmonthlyBy the assigned monthly dateVIDEDS
PVN EUEU sales list[2][10]Suppliers making intra-EU suppliesmonthly20th of the following monthVIDEDS
UBOBeneficial owner data[15]All companiesper eventAt incorporation and promptly on changeURUR portal
GPAnnual report[5][9]All companiesannualWithin 4 months of year end (small); up to 7 months (larger)VIDEDS
e-invoiceStructured e-invoice (B2G)[16][14]Suppliers to the public sector (B2B from 2028)per eventPer transaction, reported to VIDVIDPEPPOL

Compliance calendar

The same filings grouped by rhythm — what recurs when.

monthly
  • UIN20th of the following month; pay by the 23rd
  • PVN20th of the following month; pay by the 23rd
  • DDZBy the assigned monthly date
  • PVN EU20th of the following month
annual
  • GPWithin 4 months of year end (small); up to 7 months (larger)
per event
  • UBOAt incorporation and promptly on change
  • e-invoicePer transaction, reported to VID

Sources

Numbered references cited throughout this profile. Laws link to consolidated texts in the official register.

  1. Corporate Income Tax Law (Uzņēmumu ienākuma nodokļa likums)likumi.lv — Latvian legislation · law
  2. Value Added Tax Law (Pievienotās vērtības nodokļa likums)likumi.lv — Latvian legislation · law
  3. Personal Income Tax Law (Par iedzīvotāju ienākuma nodokli)likumi.lv — Latvian legislation · law
  4. Law on State Social Insurance (Par valsts sociālo apdrošināšanu)likumi.lv — Latvian legislation · law
  5. Annual Reports and Consolidated Annual Reports Law (Gada pārskatu likums)likumi.lv — Latvian legislation · law
  6. Commercial Law (Komerclikums)likumi.lv — Latvian legislation · law
  7. Micro-enterprise Tax Law (Mikrouzņēmumu nodokļa likums)likumi.lv — Latvian legislation · law
  8. Law on Taxes and Fees (Par nodokļiem un nodevām)likumi.lv — Latvian legislation · law
  9. Corporate income tax — guidanceVID (State Revenue Service) · authority
  10. VAT — guidanceVID (State Revenue Service) · authority
  11. Personal income tax ratesVID (State Revenue Service) · authority
  12. Microenterprise taxVID (State Revenue Service) · authority
  13. Real estate taxVID (State Revenue Service) · authority
  14. Changes in taxation and finances from 2026Ministry of Finance · authority
  15. Limited liability company (SIA) — registrationEnterprise Register (UR) · register
  16. eInvoicing in LatviaEuropean Commission · eu