Page 35 - CEE Tax Guide 2025

Personal income tax /
VAT options in Latvia Applicable / limits
Social security system
Distance selling OSS system from July 1, 2021.
VAT registration threshold –
EUR 10,000/year. As of January 1, 2025, a new progressive PIT rate
was introduced, which includes the following: 25.5%
Call-off stock is applied for income of less than EUR 105,300 per

VAT group registration year; and 33% for income exceeding EUR 105,300
per year. A maximum amount for the object of social
Cash accounting – yearly EUR 300,000/year applicable
amount in EUR (approx.) to private entrepreneurs contribution tax is set starting from 2025 in the
or agricultural companies. amount of EUR 105,300.
Import VAT deferment The tax on annual income of more than EUR 105,300
Local reverse charge Timber services, construction per year is calculated in a recapitulative order
services, grain crops, metal, etc. when submitting the annual income declaration.
Option for taxation If a payroll tax book is not submitted at a place
letting of real estate No of employment, the salary tax rate is 25.5%
regardless of monthly income.
supply of used real estate
Also, from 1st of January 2025, the non-taxable
VAT registration EUR 50,000/year
threshold minimum has been increased and been fixed to EUR
510 (please see wage calculations below).

and health services, certain financial services, etc. Income from capital and capital gains is taxed with
Entrepreneurs with annual sales of less than EUR a 25.5% PIT rate.
50,000 are exempt from VAT obligations. Monthly
returns are electronically recorded. The options/ Additionally, as of January 1, 2025, an additional
limits based on the EU Directive are determined 3% rate is applicable to the total excess of taxable
in the VAT Act. annual income over 200,000 euros (including
capital gains and non-taxable dividends).
Other indirect tax types in Latvia include excise Active incomes fall under the scope of the SSC
and customs duties, and some transactions related system: individual social contributions equal a total
to public administration (e.g. submitting application of 34.09%, of which the employer’s contribution
forms, issuing certificates, granting permissions, is 23.59% and the employee’s contribution is 10.5%.
etc.) are also subject to stamp duty.
Benefits in kind earned within employment are
taxed with PIT and SSC at standard rates. The
examples below show the cost to the employer and
employee in the cases of the minimum and the
average wage in the private sector.

Wage related taxes in Latvia Minimum wage Average wage in private sector
Exchange rate KGS/EUR 97 in EUR in EUR

740 1,666
Total wage cost 915 124.00% 2,059 124.00%
Social contribution tax 175 23.59% 393 23.59%
Gross salary 740 100.00% 1,666 100.00%
Employee social contribution 78 10.50% 175 10.50%
Personal income tax 39 5.00% 250 23.00%
Net salary 623 84.00% 1,241 67.00%

Agris Nurža
Tax Partner
Phone: +371 67379031
E-mail: agris.nurza@forvismazars.com

Central and Eastern European tax guide 2025 Forvis Mazars 35