Latvia Tax Rates
Latvia operates a progressive income tax system with rates of 20%, 23%, and 31%, combined with a corporate tax system modeled after Estonia's distribution-based approach. Corporate profits are taxed at 20% only upon distribution, making Latvia attractive for reinvestment. The country features a 21% standard VAT and a growing focus on attracting digital businesses and startups.
Top Income Tax Rate
31%
Corporate Tax Rate
20%
VAT / Sales Tax
21%
Capital Gains Tax
20%
Detailed Tax Information
Income Tax Brackets
Latvia applies progressive income tax rates: 20% on income up to €20,004, 23% on income from €20,005 to €78,100, and 31% on income above €78,100. A non-taxable minimum of €6,000 per year applies (reduced for higher incomes). Capital income is taxed at a flat 20%. Latvia reformed its tax system in 2018, moving from a flat 23% rate to the current progressive structure.
| Income Range | Tax Rate |
|---|---|
| €0 – €20K | 20% |
| €20K – €78K | 23% |
| €78K+ | 31% |
Corporate Tax
Latvia adopted Estonia's distribution-based corporate tax model in 2018. Retained profits are not taxed. Distributed profits are taxed at 20/80 (20% on gross, equivalent to 25% of the net dividend). This applies to dividends, deemed distributions, and certain other outflows.
Standard Rate
20%
Capital Gains Tax
Capital gains are taxed at 20% for individuals. Real estate gains are taxed at 20% if the property was held for less than 5 years or was not the primary residence. Securities gains are taxed at 20% as capital income.
Rate
20%
VAT / Sales Tax
Latvia applies a standard VAT (PVN - pievienotās vērtības nodoklis) rate of 21%, with reduced rates of 12% and 5%. The system follows EU VAT directives.
Standard Rate
21%
Cryptocurrency Tax
Cryptocurrency gains in Latvia are taxed at 20% as capital income. Each disposal is a taxable event. Latvia follows general income tax principles for crypto assets. Mining income may be classified as business income.
Tax Treaties
Latvia has approximately 62 double taxation treaties. As a Baltic EU member, Latvia's treaty network supports trade with Nordic, European, and global partners.
Treaty Network
62
Double taxation agreements
Major treaty partners:
Key Details
Relocate to Latvia
See how much you could save by moving here from your current country.
$-10,290
Tax in United States
$24K
24.4% effective
Tax in Latvia
$35K
34.7% effective
Additional Cost
42.2%
more tax annually
US Citizens: Important Note
US citizens are taxed on worldwide income regardless of residence. You'll still need to file US taxes, though the Foreign Earned Income Exclusion and Foreign Tax Credit may reduce your liability.
