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Income tax in Latvia 2026
Earned income pays 25.5% up to EUR 105,300 and 33% beyond — the employer withholds a flat 25.5% monthly and the progressive top-up settles in the annual return.
A second, quieter threshold sits at EUR 200,000: total annual income above it — counting even exempt dividends — bears an extra 3%.
At a glance
- top rate
- 33% above EUR 105,300 (+3% surcharge over EUR 200,000)
- entry band
- 25.5% after the EUR 6,600 annual allowance
- tax year basis
- Calendar year, cash basis
- filing deadline
- 1 March – 1 June (1 April – 1 July above EUR 105,300); tax by 23 June/July, instalments possible
- residency basis
- Worldwide if registered abode in Latvia or 183+ days in any 12 months
- regime flag
- Digital-nomad 15% election; micro-enterprise 25% turnover tax
Rates
Income tax on earned income (2026)
| Annual taxable income (EUR) | Rate on this band | Note |
|---|---|---|
| 0 – 105,300 | 25.5% | Withheld monthly at this rate |
| Over 105,300 | 33% | Applied through the annual return |
| Total income over 200,000 | +3% | Surcharge counting taxable and exempt income (dividends included) |
Marginal rates apply within each band.
Special regimes (2026)
| Rate | Base | Applies to |
|---|---|---|
| 15% | Remote-work salary | Digital-nomad visa holders working for an employer registered in another developed-economy country — elective, no allowances, within 365 days of becoming resident |
| 25% | Annual turnover | Micro-enterprise tax — replaces income tax and the owner's social contributions |
| EUR 17 a year | Flat | Reduced licence fee for pensioners and category I/II disabled in listed trades (income under EUR 3,000) |
| 15% | Daily earnings (min EUR 0.70/day) | Seasonal agricultural workers (up to 90 days) |
Thresholds & allowances
- Personal allowanceEUR 6,600 (2026)
EUR 550 a month for all income levels — no phase-out since 2025
- Pensioner allowanceEUR 12,000 a year
Fixed, for those at Latvian pensionable age
- DependantsEUR 250 a month each
Children and qualifying non-working spouses, parents and grandparents
- Pension and insurance deductions10% of income, max EUR 4,000
Private pension contributions and life insurance premiums combined
- Medical, education and donationsUp to EUR 600
Combined cap (or 50% of income if lower) for these itemized deductions
Surcharges
- High-income surcharge3%over Total annual income above EUR 200,000, including exempt dividends
Residency
Residency trigger
A registered abode in Latvia or 183+ days in any 12-month period makes you resident from your first day of entry; couples are always taxed separately.
Non-resident treatment
Non-residents pay 25.5% withholding on Latvian employment (33% above EUR 8,775 a month when covered by a foreign social scheme) and only get allowances if they are European Economic Area (EEA) residents earning over 75% of their income in Latvia.
Notes
- Business income runs through the same 25.5%/33% scale, with expenses fully deductible since the 80% cap was struck down in 2022; business losses carry forward 3 years.
- The micro-enterprise tax suits solo traders without value-added-tax registration — one 25% levy on receipts covers everything for the owner.
- Royalty recipients are generally self-employed since 2021, but a transitional withholding regime (25%) runs until end-2027 for those who don't register.
- Inactive registered self-employed pay a EUR 50 minimum annual tax.
- Employees on Latvian-flagged international ships are taxed on notional pay — 2.5 times the minimum wage for officers, 1.5 for crew.
- Capital gains returns run quarterly once gains pass EUR 1,000 in a quarter.
FAQ
What are Latvia's income tax rates?
25.5% up to EUR 105,300 and 33% above, with a 3% surcharge once total annual income — even exempt dividends — passes EUR 200,000.
What is the digital-nomad tax deal?
Holders of Latvia's long-term remote-work visa can elect a flat 15% on salary from a foreign-registered employer, choosing it within 365 days of becoming resident — but no allowances apply.
How much is tax-free?
EUR 6,600 a year (EUR 550 a month) for everyone in 2026, plus EUR 250 a month per dependant; pensioners get a fixed EUR 12,000.
Figures: tax year 2026, compiled from public sources. Not tax advice.