Latvia

Click to download PDF:  As per 1 January 2016

EXPATRIATE AND EMPLOYER TAX COMPLIANCE AND ADVISORY
Tax rate 23%
Tax period Calendar year
Tax residency / Domicile according to domestic law Person shall be treated as Latvian tax resident if:
1. Permanent place of living is in Latvia or
2. the person is present in Latvia for 183 days or more
Tax registration Within one month from commencement of activities in Latvia in case no local employer exists.
In case of local employer – upon commencement of work
Employment income definition Any type of income (both cash and in kind) received within employment relationships
Examples of tax exemption Allowance for dependants, non-taxable minimum, daily allowances in case of business trips etc.
Specific expatriate concession Not applicable
Income of board members Taxed similarly to employment income
Tax returns In case of local employment, the employer is liable for filing of tax returns.
In case of foreign employer, the tax return has to be filed by the employee.
Tax payments Generally the tax is payable on a monthly basis
TAX TREATIES
Employment income / income from board members Art 15/16 Model OECD Tax Convention
INTERNATIONAL SOCIAL SECURITY
Cross border employments EU Regulation No 883/2004 and EU regulation No. 1408 / 71
Exception under Art 16 of Reg. 883/2004
and Art 17 of Reg. 1408/71
Generally applicable
Social Security Cost as % from gross salary and absolute amounts 34,09%, which is payable by employer (rate 23,59%) and employee (rate 10,50%)
IMMIGRATION
Work permit Nationals of EU, EEA and Switzerland  do not need a work permit to work in Latvia.
Nationals of other countries need to obtain a  work permit to work in Latvia.
Visa EU and EEA citizens do not need a visa to enter Latvia.
Third country nationals are required to receive visa.
Residency permits / registration certificate EU and EEA citizens are required to apply for the registration certificate, if the presence in Latvia exceeds 3 months.
Third country citizens need to apply for a residence permit, if the stay in Latvian exceeds 90 days.
Driving license Driving licence, issued by another EU or EFTA member state, can be used in Latvia without any limitations.
Driving licences, issued by other countries can be used in Latvia only for driving a B category vehicle (passenger car). If the driving license contains data in non-Latin letters, a notarial translation should be presented.
Third country citizens shall receive a Latvian driving license, if the presence in Latvia exceeds 1 year.
STOCK OPTION PLAN Certain tax exemptions are applicable in case the provisions of stock option plan provided by the law are fulfilled.
Agris Nurza
Project Manager
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