Europe · Tax guide
Latvia
Latvia, like Estonia, taxes company profits only when they are distributed, at 20/80 of the net distribution (20% of the gross). VAT is 21%, and B2B e-invoicing becomes mandatory on 1 January 2028. Taxes are administered by the State Revenue Service (VID).
At a glance
- Corporate income tax
- 20/80 of the net distribution (20% of the gross)
- VAT
- 21%
- VAT registration
- €50,000
- Employer social security
- 23.59%
- E-invoicing
- 1 January 2028
- Global minimum tax
- 15%
Only on distributed profits
Reduced rates 12% and 5%
Annual turnover
On salaries
Mandatory B2B
Groups with revenue of €750 million or more
Tax on distributed profits
Retained profits are not taxed. Companies pay 20/80 of the net distribution (20% of the gross) when they distribute profits or make deemed distributions, declared monthly.
VAT and e-invoicing
VAT is 21%, with reduced rates of 12% and 5%. Registration is required once turnover exceeds €50,000 a year. Structured B2B e-invoicing and reporting become mandatory on 1 January 2028.
Employers
Employers pay social security contributions of 23.59% of salary and withhold personal income tax and the employee's share.
Transfer pricing and the global minimum tax
Documentation is required where related-party transactions exceed €250,000 a year. Related-party transactions must be at arm's length. Groups with revenue of €750 million or more are subject to the global minimum tax at 15%.
Key dates
- MonthlyCorporate income tax return for distributions
- By the 20th of each monthVAT return
- 1 January 2028Mandatory B2B e-invoicing
Figures and sources
9 figures- Corporate income tax on distributed profits20/80 of the net distribution (20% of the gross)Checked against the official source
- VAT standard rate21%Checked against the official source
- Mandatory B2B e-invoicing and reporting1 January 2028Checked against the official source
- VAT reduced rates12% and 5%Checked against the official source
- Annual turnover above which VAT registration is required€50,000Checked against the official source
- Employer social security contribution23.59%Checked against the official source
- Global minimum tax rate15%Under professional review
- Group revenue for the global minimum tax€750 millionUnder professional review
- Annual related-party transactions above which documentation is required€250,000Checked against the official source
Indicative only. This assessment is a high-level overview of tax obligations in Latvia based on the information you provided and rules in force for 2026. It is not tax or legal advice. Consult a Latvian tax adviser before making compliance decisions.