In this page: Accounting Rules | Tax Rates | Intellectual Property | Legal Framework | Standards | Business Practices
Amounts are given in Latvian currency. The documents are in Latvian. If a member of a company is not a natural person or a legal entity of the country (registered company), it is possible, with the agreement of the parties concerned, to use a second language, that the auditors deem to be acceptable. The accounting documents and the supporting documents that accompany them must remain on Latvian territory. Any accounting entry must be supported by an appropriate document.
The accounting year spreads over 12 months. It corresponds to the civil year, but the shareholders can choose other dates. Companies that form a group must have identical accounting years. This year can be modified, but the modification must be justified and explained in the notes attached to the annual report.
A company's financial statements must include a balance sheet, a profit and loss account, notes to the accounts and an annual report.
Moreover, the European Directive of 19 July 2002 obliges all European companies listed on the Stock Exchange to establish their consolidated annual accounts on the basis of IAS/IFRS.
Exports of goods and related services; intra-Community supply of goods; international transport services; and tourism services provided outside Latvia are zero-rated.
A reduced rate of 5% is applicable until 31 December 2023 on certain foodstuff (including fresh fruit, berries and vegetables).
Latvia applies a reduced VAT rate of 12% on certain categories of goods and services, including mass media and subscriptions thereto; specialized products for infants; medicines and medical devices (those authorized by state pharmaceutical authorities); literature printed especially for schools and universities and original literature; firewood and fuelwood supplied to natural persons; supply of thermal energy to natural persons; public transport services provided in Latvia; accommodation services provided in Latvia.
Learn more about Service Providers in Latvia on Globaltrade.net, the Directory for International Trade Service Providers.
Latvia | Eastern Europe & Central Asia | United States | Germany | |
---|---|---|---|---|
Number of Payments of Taxes per Year | 7.0 | 13.9 | 10.6 | 9.0 |
Time Taken For Administrative Formalities (Hours) | 168.5 | 226.2 | 175.0 | 218.0 |
Total Share of Taxes (% of Profit) | 38.1 | 36.5 | 36.6 | 48.8 |
Source: Doing Business - Latest available data.
Personal income tax | Progressive rates from 20% to 31% |
Up to EUR 20,004 | 20% |
EUR 20,004 - 62,800 | 23% |
Above EUR 62,800 | 31% |
Capital gains tax | 20% on qualifying capital gains |
Moreover, individuals may deduct from the income reported on their tax returns:
- Donations to acceptable charitable organisations
- Education and medical expenses (up to 50% of taxable income, capped at EUR 600 per year for expenses on behalf of other family members)
- Contributions to private pension funds (10% of taxable income, capped at EUR 4,000) and to life insurance schemes
- Differential personal allowance (DPA): A lump-sum deduction varying between EUR 0 and EUR 300 a month depending on the annual taxable income: for tax year 2021, the full DPA only applies to individuals with a monthly income up to EUR 1,800, varying according to the level of income. An additional deduction of EUR 250 per month applies for each qualifying dependant.
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Type of property and law | Validity | International Agreements Signed |
---|---|---|
Patent Patent Law 30 March 1995 |
20 years, renewable for a period not exceeding 5 years | |
Trademark Law on trademarks and indications of geographical origin 16 June 1999 |
10 years, renewable for a consecutive period of 10 years |
Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks |
Design Law on the protection of Designs and Industrial Models 4 May 1993 |
5 years, renewable for two consecutive 5-year periods | |
Copyright Law on copyright 6 April 2000 |
Came into force on 11 May 2000. The text of the law |
WIPO Copyright Treaty |
Industrial Models Law on the protection of Designs and Industrial Models 4 May 1993 |
Text of the law |
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New Year's Day | 1 January |
Good Friday | Friday before Easter Sunday |
Easter Monday | Easter Monday |
Labor Day | 1 May |
The Republic of Latvia joined the European Union | 4 May |
LIGO holiday (summer solstice) | 23 June |
Feast of St John (JANI) | 24 June |
Proclamation of the Republic, national day | 18 November |
Christmas Day | 25 December |
St Sylvester | 31 December |
Christmas and New Year's Day | A week before New Year's Day. |
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Latest Update: April 2022