Paying Taxes in Latvia

1. What is the corporate tax in Latvia?
The general corporate income tax rate for companies in Latvia is 15%. If you set up a micro company, you will benefit from a lower corporate tax rate of 9%.

2. What is the VAT in Latvia?
The standard VAT rate in Latvia is 22%, with a reduced rate of 12% for accommodation and newspapers, while other services may be exempt from VAT.

3. How can the VAT be refunded in Latvia?
In order to get a VAT refund in Latvia, you have to submit an application to the State Revenue Service, where your application will be checked within 30 days. The exceeding amount will be redirected to the next taxation period until the end of the taxation year.

4. What is the dividend tax in Latvia?
If the dividends are paid to a company that is located in a EEA member state, there is no dividend tax. For dividends paid to nonresident companies, the tax rate is 10%, unless there is a treaty that stipulates differently.

5.    Are there any incentives for foreign investors in Latvia?
Latvia encourages investments from foreign residents with various benefits. For instance, there is a rebate of interest on loans to companies that create employment in economical deprived areas and also a 70% grant on the cost of hiring new employees. Moreover, there are tax reductions for companies that invest in projects supported by the State or hi-tech firms. Special Economic Zones also provide exemption from VAT and other tax reductions.

6. Why do I need a local accountant for my business in Latvia?
Most local accountants are already familiar with the Latvian system, so they would deal more efficiently with accounting issues. Besides, most of them are English speakers, so there will not be a problem of communication.

BridgeWest offers advice on how to start a company in Latvia, including virtual office and other related services.