Latvia - Tax Guide for Freelance Contractors
Welcome to our guide to Latvian Taxation. You will find a wealth of information which will be useful if you plan to work in, or place consultants in, Latvia.
Our tax guides give a general overview of the actual taxation rates and rules at the time of writing. There are of course many ways to legally reduce tax or social security burdens in Latvia. Please contact us for more information or an actual breakdown of your situation, and to find out more about our range of payroll and contact management services in Latvia.
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Latvian Income Tax
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Umbrella and Contract Management Services in Latvia
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Tax residents in Latvia: are liable to pay tax in Latvia on their worldwide income,
Non tax residents in Latvia: are liable to pay tax on Latvian-source income only.
Individuals will be regarded as tax residents:
- if their permanent place of residence is in Latvia, or
- if their stay in Latvia is 183 days or more in any 12-month period starting from the date of arrival in Latvia, or
- if they are a citizen of Latvia emplyoed abroad by the Latvian government.
Married persons are taxed separately.
Taxable income includes:
- income from employment,
- income from the exercise of a business or a profession,
- investment income,
- benefits in kind.
Certain deductions are permissible for 2012 including:
- basic personal allowance of LVL 45 per month,
- medical expenses and health insruance limited to LVL 150 per year
- tax allowance for dependents of LVL 70 per month (under certain conditions),
- certain approved pension and life/hetlh insurance premium payments
Income tax rates for 2012:
- 25.00% flat tax rate.
Wage taxes are withheld by the employer.
By April 1st following the tax year.