Latvia

Personal deductions

Residents may deduct the following non-business expenses:

• Compulsory NSIC (employee part) paid on income subject to Latvian PIT. NSIC is payable in Latvia and EU/EEA/Organisation for Economic Co-operation and Development (OECD) countries.
• Spending on education and medical services (including dental services and scheduled operations), donations to public benefit organisations, and donations to political parties of up to 50% of the person’s annual taxable income, capped at EUR 600 a year for each family member.
• Contributions to private pension funds and endowment insurance (the policy should mature in at least ten years) at 10% of annual taxable income, capped at EUR 4,000.

A person planning to deduct expenses for completing their children’s interest-related programmes should consider the following factors:

• These expenses do not apply to any income a micro-business owner derives from the micro-business, any borrowing treated as income, any income from capital (other than capital gains), any income from property, seasonal farm workers’ income, or any business income for which so-called 'patent fees' are paid.
• These expenses are not deductible if covered out of funds received from public benefit organisations or as a gift.

Residents and non-residents (who are residents of EU/EEA member states and earn at least 75% of their worldwide income in Latvia) can deduct these expenses from their total taxable income, except for income from capital and capital gains.

Personal allowances

In 2025, an income-differentiated personal allowance is cancelled, and the employer is required to apply a fixed personal allowance (FPA) of EUR 510, regardless of their income level. 

If a wage tax book is submitted via the Electronic Declaration System (EDS), a monthly dependent allowance of EUR 250 can be claimed for each dependant in 2025. 

In addition, a person with a recognised disability is entitled to additional tax relief as follows: 

• EUR 1,848 per year or EUR 154 per month for individuals classified under disability groups I or II. 

• EUR 1,440 per year or EUR 120 per month for individuals classified under disability group III.

A person recognised as politically repressed or as a member of the national resistance movement is entitled to additional tax relief of EUR 1,848 per year or EUR 154 per month.

Business deductions

If a person is registered as a sole trader, business expenses are fully deductible, provided that appropriate supporting documents are in place.