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Latvia

Taxes

If you want to set up a company in Latvia, this article will educate you on the tax laws for a LLC, which is the most common company structure in Latvia.

Latvia taxes corporate income on a worldwide basis. The prevailing tax rate for offshore income, from our research, and your results may vary, is 15%. A tax credit may be available for foreign tax paid up to the Latvia tax rate. Some tax-exemptions may apply for offshore dividends and offshore capital gains from the sale of shares. Taxes are quite low in Latvia as the headline corp. tax rate is 15%. This ranks Latvia as 47th when compared to corporate tax rate worldwide.

The VAT rate in Latvia is 21.00%, which ranks Latvia as 155th overall with regards to VAT taxation rate internationally. In terms of other taxation, an employer will contribute 23.59% to the equivalent of a social security fund and an employee will contribute 10.50%. The overall complexity of the tax system is medium. This is measured by average time to comply with a country's labor tax requirements is as it is 99hours. Contributing to this is the number of yearly labor tax payments, which is 12 in LV.

Thin capitalisation standards are officially enacted. This refers to any type of laws on given company with respect todebt-to-asset ratios. Dividends in Latvia are generally exempted from tax, unless those received from companies located in black-list jurisdictions (in this case would be taxed at 15%). A dividend is a distribution of a portion of a company profit, voted on the board of directors, to a class of its shareholders. Dividends can be one of the following cash payments, shares of stock, or other property. Capital Gains from the sales of unlisted shares may be exempted, except those from black-listed jurisdictions. Capital Gains from the disposal of securities are subject to Corporate Income Tax, except public EU/EEA securities, which are tax neutral. Capital Gains from the sale of property are taxed at the CIT standard rate of 15%. A capital gains tax is levied on the profits that a corporation or natural person realizes when he or she sells sells a capital asset for a price that is higher than the purchase price.

Latvia does not generally levy withholding taxes on payments to non-residents on interests, dividends or royalties. However, payments to residents of black-list jurisdictions may be taxed at a withholding tax rate of 15%, being 5% in the case of interest paid by Latvia banks.
There is no known tax on wealth in Latvia. There are no known inheritance and transfer taxes in Latvia. There is a real property tax. We are not aware of any well known research and development tax incentives here.

The above is not tax or legal advice for your particular circumstances. We are able to refer you to a tax advisor in Latvia who can give you an answer. Contact us today. Click the free consultation button above or incorporate now if you are in a hurry.

Country details

Latvia
EUR
Riga
Europe
Latvian, Russian, Lithuanian
2,217,969

Tax treaties

Country Type Date Signed
Belarus DTC  1995-09-07
Jersey TIEA 2013-01-28
Russian Federation DTC  2010-12-20
Czech Republic DTC  1994-10-25
Iceland DTC  1994-10-19
Germany DTC  1997-02-21
Netherlands DTC  1994-03-14
Switzerland DTC  2002-01-31
Estonia DTC  2002-02-11
Ireland DTC  1997-11-13
Romania DTC  2002-05-25
Uzbekistan DTC  1998-07-03
China DTC  1996-06-07
Albania DTC  2008-02-21
Kyrgyzstan DTC  2006-12-07
Hungary DTC  2004-05-14
Belgium DTC  1999-04-21
Tajikistan DTC  2009-02-09
Armenia DTC  2000-03-15
Luxembourg DTC  2004-06-14
Moldova, Republic of DTC  1998-02-25
Morocco DTC  2008-07-24
Norway DTC  1993-07-19
Kuwait DTC  2009-11-09
Montenegro DTC  2005-11-22
Slovenia DTC  2002-04-17
Turkmenistan DTC  2012-09-11
Greece DTC  2002-03-27
United States DTC  1998-01-15
France DTC  1997-04-14
Austria DTC  2005-12-14
Malta DTC  2000-05-22
Finland DTC  1993-03-23
Lithuania DTC  1993-12-17
United Kingdom DTC  1996-05-08
Israel DTC  2006-02-20
Singapore DTC  1999-10-06
Qatar DTC  2014-09-06
United Arab Emirates DTC  2012-03-11
Serbia DTC  2005-11-22
Ukraine DTC  1995-11-21
India DTC  2013-09-18
Slovakia DTC  1999-03-11
Georgia DTC  2004-10-13
Italy DTC  1997-05-21
Guernsey TIEA 2012-09-05
Turkey DTC  1999-06-03
Sweden DTC  1993-04-05
Portugal DTC  2001-06-19
Croatia DTC  2000-05-19
Azerbaijan DTC  2005-10-03
Kazakhstan DTC  2001-09-06
Korea, Republic of DTC  2008-06-15
Denmark DTC  1993-12-10
Poland DTC  1993-11-17
Spain DTC  2003-09-04
Former Yugoslav Republic of Macedonia DTC  2006-12-08
Mexico DTC  2012-04-20
Canada DTC  1995-04-26
Bulgaria DTC  2003-12-04

Tax treaties Map

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