Skatter Lettland

Taxes in Latvia

Company tax in Latvia 0%

General Company Tax*0%
Simplified Corporate Tax for temporary activities (max 1 year) **20%

*) When profit remains in the company, 0%. If divided, the CIT is 20% on net.
**) The simplified corporation tax applies to temporary activities, then corporate tax is calculated by 20% on turnover instead of profit. The requirement is that the business is temporary and is carried out for a maximum of 1 year. (Eg seasonal activities or other short-term temporary activities.)

VAT

The general VAT in Latvia21%

Payroll Taxes

Social fees23,59%
Payroll Tax23%

Social fees are distributed between employers and employees. The employer’s share is 23.59% and the employee’s share is 10.5%. The employer also pays the employee’s part to the tax office, but it is treated like the payroll tax and is no expense for the company. Salaries and social security contributions apply to employees of the Latvian company.

Micro-company a company with Micro tax

Micro-company is not a separate company type, it is a standard Latvian Ltd registered for Micro Tax.

CIT for Micro company15%
Payroll taxes for Micro company0%

Criterias to be met in order to get registered for micro tax are:

  • Shareholders shall be private individuals
  • Revenue does not exceed 40,000 EUR in a calender year
  • Not more than 5 employees
  • One person can be employeed in one Micro company only
  • Board members shall be emplyeed in the Micro company
  • Max net salary per employee 720 EUR/month

If any of the criterias fail/exceeds, the company will get increased tax.

Benefit taxation

Company car
Use of company car private (unlimited)
Tax-free kilometer when driving your car in work

Dividend Tax for shareholders

Dividend tax, EU company0%
Dividend tax, personal10%

The dividend tax applies to the shareholders. Shareholders residing in another EU country follow the tax rules in their home country.