fm.gov.lv Taxes & Fees System Latvia : Ministry of Finance

Organization : Ministry of Finance
Type of Facility : Taxes & Fees System
Country: Latvia

Website : http://www.fm.gov.lv/en/s/taxes/

Taxes & Fees System:

The Ministry of Finance shall develop state tax and customs policy, as well as prepare recommendations for institutions responsible for tax and customs administration on implementation of tax and customs policy activities.

Related : Valsts ienemumu dienests VAT Payer Registration Latvia : www.statusin.org/9317.html

Taxes and fees system in Latvia consists of:
** state taxes, object and rate of which shall be set by the Saeima;
** state fees which shall be applicable according to Law “On Taxes and Fees” (LV) specific other laws and regulations of the Cabinet of Ministers;
** local government fees which shall be applicable according to Law “On Taxes and Fees” (LV) and binding regulations issued by the council of local government;
** directly applicable taxes and other obligatory payments set in the European Union regulatory enactments.

Direct taxes:
Enterprise Income Tax:
Shall be paid by legal entities and non-resident permanent establishments for their income. Tax rate is 15%.

Personal Income Tax:
Shall be paid by natural persons for their income. Tax rate is 24%.

State Social Insurance Mandatory Contributions:
Shall be paid by insured persons and their employers.Total rate is 34,09% which varies for different categories of insured persons.

Microenterprise tax:
Tax rate is 9% from turnover. Tax replaces state social contributions both for employees and proprietors and business risk state fee as well as personal income tax or corporate income tax depending on legal form of taxpayer. Legal form of microenterprise could be Limited Liability Company or individual merchant or individual performing economic activity without registration as an individual merchant. To qualify for status of microenterprise taxpayer the following criteria shall be met: employee’s income does not exceed EUR 700 per month, turnover does not exceed EUR 100 000 per year, the number of employees may not exceed five.

Real Estate Tax:
Shall be paid by real estate owners or legal possessors. General tax rate is 1,5% from cadastral value of property unit. Residential property is taxed at a rate 0,2%-0,4%-0,6% depending on value of the property.

Indirect taxes:
Value Added Tax:
Shall be paid by legal entities and natural persons. Standard tax rate is 21%, reduced tax rate – 12%. On 1 January 2013 new Value Added Tax Law has entered into force. Value Added Tax Law replaces the Law On Value Added Tax , which was in force from 1995 to 2012.

Excise Duty:
Shall be applied to oil products, natural gas, alcoholic drinks, beer, tobacco products, coffee and non-alcoholic drinks (except natural juices and mineral water).

Electricity Tax:
Shall be paid by persons supplying electricity to the end-users and self-governing producers. Tax rate shall be set in lats per megawatt-hour.

Tax on Cars and Motorcycles:
Tax shall be paid when the car or motorcycle is registered in Latvia for the first time.

Vehicle Operating Tax:
Shall be paid by legal entities and natural persons who own, possess or hold a vehicle, which is registered or is going to be registered in Latvia, or whose owned, possessed or held vehicle is given transit number plates.

Company Car Tax:
Shall be paid by commercial entities and foreign merchant branch who own or hold passenger vehicle which is used also for personal needs of employees and/or proprietaries.

Customs Duty:
Shall be paid by natural persons and legal entities when importing goods into the EU.

Other taxes:
Natural Resources Tax:
Shall be paid by legal entities and natural persons if extracting natural resources, distributing or importing environmentally unfriendly goods or which are allowed to perform such activities.