Personal income tax (PIT) is a tax on income paid by individuals (Latvian tax residents and non-residents) in Latvia.
Learn more about determining residence here.
Latvian residents are liable to Latvian income tax on their worldwide income.
Non-residents are liable to income tax on their Latvian-source income, for example, income from paid employment in Latvia, interest paid by Latvian company, etc.
Personal income tax rates
Latvia has a progressive PIT system. Unless the law provides for a different rate, the progressive rate is based on the level of annual income as follows:
- A rate of 20% applies to income up to EUR 20,004.
- Any portion of income between EUR 20,004 and EUR 78,100 attracts a rate of 23%.
- Any income over EUR 78,100 attracts a rate of 31%.
Certain types of income have fixed tax rates, for example:
- Income from capital other than capital gains, i.e. dividends, interest, etc. Dividends are subject to a special PIT payment regime, stipulating that a 20% PIT is payable, if CIT or PIT from these dividends has not been paid. PIT in the amount of 20% is always payable, if the payer is a company from tax havens and the payer of microbusiness tax. However, where a company has already charged its profits to CIT or paid PIT in other country, no PIT should be paid.
Other income from capital gains, including income from the sale of shares and real estate transactions, is also subject to a fixed PIT rate of 20% of profits.
Information on the application of taxes to certain types of income available in section "Taxable income".
Information on the application of payroll taxes to salaries available in section "Deductions".
Information on tax returns and payment procedures available in section "Tax administration".
In addition to PIT, individuals in Latvia also pay National Social Insurance Contributions (NSIC) and Solidarity Tax (ST). More information in the relevant sections.
