Latvia

National social insurance contributions (NSIC)

Income below the state minimum wage (EUR 780 per month in 2026) is a subject to minimum NSIC. If an individual’s total income from all NSIC-taxable income sources does not reach the minimum amount, the employer is obliged to calculate and make NSIC based on the minimum wage on the employee’s behalf. 

Employees who work for multiple employers, or individuals who are both self-employed and employed, should sum up their total income to determine whether it meets the minimum amount. 

Income on which NSIC is calculated is capped at EUR 105,300. 

The contribution rates are summarised in this table:

NSIC should be reported and paid quarterly in the case of self-employed persons, whereas monthly contributions are required to be withheld, reported, and paid by Latvian employers.

Self-employed individuals can opt to pay 10% NSIC on their actual monthly income if it does not meet the minimum NSIC treshold (less than 3 minimum monthly wages of EUR 780 in 2026 per quarter) if they submit an application on projected income per quarter. If the income meets or exceeds the minimum amount, the self-employed individual is obliged to pay NSIC at the standard rate on at least the minimum wage amount, while the remaining part of the income can be taxed at 10% NSIC.  

In addition, 10% NSIC is payable by a payer of royalty to Latvian-resident individuals (living in Latvia). 

Solidarity tax (ST)

ST has been in place since 1 January 2016. ST is applicable on income that exceeds the maximum income attracting NSIC, i.e. EUR 105,300 a year in 2026, and during the year is payable at the same rate as NSIC: 23.59% for employer and 10.5% for employee. However, the effective ST rate is 25%. Thus, for the contributions made e.g. in 2026, the employer will receive ST refund by September 2027.

• 1 percentage point to finance healthcare services, with 0.5 points coming from the employee’s part of ST and 0.5 points from the employer’s part of ST
• 10 percentage points goes to PIT, and
• the rest goes into the special budget for state pensions (impersonalized).

The ST Act does not provide for a different split if a person’s NSIC rate is lower than the standard rate. Thus, the fixed percentage points apply to all ST payers regardless of their NSIC status and rates used.

The ST payer is also required under the PIT Act to file their annual tax return between 1 April and 1 July of the following year to recalculate ST and PIT.

Consumptions taxes

Value-added tax (VAT)

The standard VAT rate on supplies of goods and services is 21%. See the Other taxes section in the Corporate tax summary for more information.

Net wealth/worth taxes

There are no net wealth/worth taxes in Latvia.

Gift taxes

Gifts in any form from individuals are subject to the progressive PIT rate after applying an annual exemption of EUR 1,425 to the value of the gift. Gifts of up to EUR 100 (including VAT) from the employer are exempt from PIT. Gifts between spouses and relatives up to the third degree are fully exempt. The exemption also applies to gifts between persons who have registered a civil partnership.

Light corporate vehicle tax (LCVT)

If LCVT is paid by the employer, no taxable car benefit arises for employees. See the Other taxes section in the Corporate tax summary for more information on the LCVT.