The tax and duty system comprises of:
- State taxes;
- State duties;
- Local government/authority duties.
Currently there are 15 different taxes in use in the Republic of Latvia. The most significant payments are listed below:
Corporate income tax (CIT)
Standard CIT rate is 15%. The tax is levied on a company’s profit (or loss) that has been adjusted by certain corrections. There are no other taxes levied on corporate income.
Value added tax (VAT)
Standard VAT rate for the delivery of goods and services is 21%. Certain products such as medicine or child foods have a reduced rate of 12%. The sale of goods within EU to taxable persons registered for VAT in EU member states are taxed with 0% VAT.
Customs tax is levied on imported goods and the rate is usually between 0 and 20% based on the type of product. Export and transit is not taxed.
An excise duty is levied on special categories of goods. Oil and oil products, alcohol, tobacco, coffee, certain soft drinks and natural gas is taxed.
Real estate tax
Real estate tax is payable annually and the standard rate is 1.5% from the official nationally registered value of the property (cadastral value). Local governments under certain conditions can adjust the rate of this tax from 0.2% to 3%.
National social insurance contributions (NSIC)
NCIS is a social payment, which is collected from both employee and employer. The standard rate for employer is 23.59%. Standard rate for employee is 9%, which must be withheld and paid by the employer.
Customs procedures and payments
Main components of customs payments:
- Customs tax;
- Excise tax.
Other indirect expenses may occur when importing goods in Latvia such as road duties, gas surcharges or port fees.
Amounts not levied by excise tax:
- 200 cigarettes, 100 cigarillos, 50 cigars, 250g of smoking tobacco (by plane) or 40 cigarettes, 20 cigarillos, 10 cigars, 50g of smoking tobacco (by other modes of transportation);
- 1 liter of alcohol with a concentration level above 22%;
- 2 liter of alcohol with a concentration level below 22%, 4 liter of wine and 16 liter beer;
- Gas located in the gas tank or 10 liter of gas in a separate container in a single vehicle.