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Latvia - Overview and introduction

Latvia - Overview and introduction

Taxation of international executives

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Aerial view of city buildings near river latvia

The extent of the liability to Latvian tax on earnings depends upon residence status in Latvia. In turn, residence depends mainly on the length of time an individual spends (or intends to spend) in Latvia and do they have a registered address in Latvia. The domicile status of the individual can also affect the liability.

There are a number of different employment arrangements for expatriates working in Latvia, however, the most common are the following:

  • An individual is seconded to work in Latvia while maintaining employment relations with their foreign employer;
  • An individual is seconded to Latvia and changed to Latvian payroll.

Latvia imposes progressive tax rates (20 percent, 23 percent and 31.4 percent) on personal income and on income derived by self-employed individual’s commercial activities (in 2019).

As of 1 January 2014, the official currency of Latvia is the Euro (EUR).

For the purposes of this publication, the host country/jurisdiction refers to the country/jurisdiction to which the employee is assigned. The home country/jurisdiction refers to the country/jurisdiction where the assignee lives when they are not on assignment.

Disclaimer:

All information contained in this publication is summarized by KPMG Baltics AS, a Latvian limited liability company and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. The information contained in this publication is based on law “On personal income tax”, the Web site of Ministry of Finance Republic of Latvia, law “On State social insurance”, the Web site of State Social Insurance Agency.

© 2021 KPMG Baltics AS, a Latvian joint stock companyand a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

For more detail about the structure of the KPMG global organization please visit https://home.kpmg/governance.

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