Tax return in Latvia

11th Jan 2023

Those who worked in the Republic of Latvia may be entitled to receive a tax refund after filing a tax declaration. We have prepared some basic, good-to-know facts which will help you navigate in Latvian tax system.

Tax rates

Latvian tax system is a progressive one. That means that the tax rate depends on the annual income. If your income was up to 20 004 EUR, the tax rate is 20%. For income between 20 004 EUR to 62 800 EUR a 23% tax rate is applied. For other income, which exceeds 62 800 EUR per year, the tax rate will be 31%.

Tax declaration is called Declaration D and consists of different annexes. For instance, Annex D1, “Income in the Republic of Latvia during the taxation year” or Annex D2, “Income of a natural person (resident) abroad”.

Resident or non-resident

According to the Latvian law, there are three conditions under which an individual is considered a tax resident:

  • If the person has a registered place of residence in Latvia,
  • If the person stays in Latvia more than 183 days per calendar year,
  • Citizens of Latvia, working abroad for the employer, registered in Latvia.

Note, that receiving dividends is not considered as an employment and can not be used to confirm your residency status.

When to file a tax return

The period to file a tax return starts from the 1st of March and ends on the 1st of June. However, if you earned more than 62 800 EUR per year, you need to prepare your tax declaration from 1st of April till 1st of July. Sometimes there are situations where it is necessary to indicate any changes in previous declarations. You can use this situation to file a tax return up to 3 years back. For example, you were self‑employed and forgot to enclose one invoice to your declaration. You can send an additional tax returns and all needed documents one more time.

Social contributions

Each employee is obliged to pay mandatory state social insurance contributions (MSSIC). The standard fee for employers is 23,59% - 34,09% and 10,5% fee is paid by the employee.

Need help? Ask our tax advisor for a consultation.

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