Latvia is one of the few EU countries with a tax break written for digital nomads. If you move there on the remote work visa, you can choose to pay a flat 15% on your remote work income for your first 365 days as a resident. After that, or if you come any other way, you pay 25.5% on most income, with higher rates only for top earners.
This guide covers Latvian personal tax for people moving to Latvia in the 2026 tax year.
The key question is simple. Is your income from work, a pension, or investments? Latvia taxes work heavily through social insurance, but leaves most dividends and a large slice of pension income untaxed.
What's changed: since 2025, Latvia has taxed annual income at 25.5% up to €105,300 and 33% above that, with an extra 3% on total income above €200,000. For 2026, the tax-free allowance rose from €510 to €550 a month and the minimum wage from €740 to €780 a month. From 1 January 2026, dividends from companies that choose the new optional 15% corporate rate are taxed at 6% in your hands. Crypto-asset service providers also report every user's transactions to the tax authorities from 2026. A new Immigration Law adopted on 20 August 2026, in force since 15 September 2026, keeps the remote work visa.
📋 Latvia tax at a glance for 2026
Topic | Details |
|---|---|
Tax year | The calendar year. Returns for 2026 are filed between 1 March and 1 June 2027 |
Tax system | Worldwide income for residents. Non-residents pay tax on Latvian income only |
Top income tax rate | 33% above €105,300, plus 3% on total income above €200,000. The first €550 a month is tax free |
All-in on a US$100k salary | About 31% (€87,000, single, including 10.5% social insurance) |
Remote work regime | Optional 15% on remote work income for your first 365 days, for remote work visa holders |
Dividends, interest, capital gains | Dividends exempt where the company paid corporate tax or had tax withheld. Interest and gains: 25.5% |
Crypto gains | 25.5% as capital gains |
Residence at a glance | Getting in: easy (a declared residence in Latvia, or 183 days in any 12 months). Leaving: you can be non-resident from the day you leave if your ties abroad are closer |
Double tax treaties | 64 in force |
The 15% rate for remote workers
Why do remote workers look at Latvia? Because the income tax law gives holders of the remote work visa a choice of tax rate in their first year.
Image 1 — remote workers can choose a flat 15% in their first year
If you hold a long-term visa for remote work, you can choose a flat 15% rate on income from remote work for an employer registered in another OECD country, or from your own business registered in an OECD country. The rate applies for 365 days from the day you become Latvian tax resident.
Employees of a foreign employer tell the State Revenue Service (VID) that they're opting in, register as a taxpayer and pay quarterly.
The self-employed make the choice by declaring the income at 15% in their annual return.
What you give up: on that income you can't use the monthly allowance, dependant reliefs or deductible expenses.
Treaty residence: it doesn't apply if a double tax treaty makes you resident in the other country.
Social insurance can still apply on top. If Latvian rules cover you, your contributions are deducted before the 15% is worked out.
On €87,000 of salary with 10.5% social insurance, the 15% route costs about €20,800, or 24% all-in, against about 31% under the normal rules.
One point to check: the income tax law still refers to the old Immigration Law, so confirm with VID that the option carries on under the new one.
👉 State Revenue Service: the 15% rate on remote work income (in Latvian)
👉 Law on Personal Income Tax: rates in articles 15 and 15.1, allowances in article 12 (in Latvian)
When you become tax resident in Latvia
You're Latvian tax resident if any one of these applies:
your declared place of residence is in Latvia
you stay in Latvia for 183 days or more in any 12-month period that starts or ends in the tax year
you're a Latvian citizen employed abroad by the Latvian government
The first test catches people out. If you've declared your home address in Latvia, you're resident even in a year spent mostly elsewhere.
The 183-day test runs on any 12 months, not the calendar year, so a stay from September to March can make you resident. If you weren't resident the year before, you're resident from the day you arrived.
How you stop being resident
You stop being resident once none of the tests applies, so start by ending your declared residence in Latvia. In the year you leave, you're non-resident from the day you leave if you won't be resident the following year and your ties abroad are closer, for example a home or family there, or social insurance paid there.
👉 Law on Taxes and Duties, article 14: who is resident (in Latvian)
Income tax rates for 2026
Salaries, self-employed profits, pensions and rent are taxed together on this scale. Interest and gains are taxed separately at 25.5%.
Latvia income tax rates for 2026
Annual income | Rate |
|---|---|
Up to €105,300 | 25.5% |
Over €105,300 | 33% |
Total income over €200,000 | 3% extra |
Source: Law on Personal Income Tax, articles 15 and 15.1, and the State Revenue Service rate table.
The extra 3% is worked out in your annual return and counts all your taxable income, including interest and gains, plus dividends that are otherwise tax free.
The tax-free allowance is €550 a month in 2026 (€6,600 a year), the same for every resident whatever their income. Your employer applies it through payroll if you give them your tax book. If you receive a pension, your allowance is €12,000 a year instead.
Worked example
You're single, resident in Latvia for 2026 and earn €87,000 (about US$100k).
You pay social insurance of €9,135 (10.5%). After that and the €6,600 allowance, your taxable income is €71,265.
Your income tax is €18,173, all at 25.5%.
Your all-in bill is about €27,300, or 31% of your salary. Your employer pays a further 23.59% on top, which doesn't come out of your pay.
👉 State Revenue Service: personal income tax rates
👉 State Revenue Service: personal income tax and the 2026 non-taxable minimum
👉 Ministry of Finance: changes in taxation from 2026
Freelancing in Latvia
As a self-employed person you register with VID before you start, which is free. You're then taxed on your profit, meaning income less business expenses, on the same 25.5% and 33% scale.
Social insurance is the bigger cost. You choose the amount you're insured on, but it must be at least the minimum wage (€780 a month in 2026). You pay 31.07% on that, plus a 10% pension contribution on the difference between your actual income and the amount you chose. Contributions are paid quarterly.
On US$100k of profit with no expenses, insured at the minimum wage, that's about €10,700 of contributions and €17,800 of income tax, or about 33% all-in.
Two simpler regimes only suit small businesses:
Micro-enterprise tax: 25% of turnover in 2026, covering income tax and social insurance, for turnover below the VAT registration threshold.
Reduced licence fee: €17 a year, but only for old-age pensioners and people with a group 1 or 2 disability, in listed craft and household service activities, with business income under €3,000 a year and no employees.
👉 State Revenue Service: self-employed persons and individual entrepreneurs
👉 State Revenue Service: micro-enterprise tax
Crypto, investments and pensions
How is crypto taxed in Latvia? VID treats virtual currency as a capital asset, so your gain is taxed at 25.5%, however long you held it. The gain is the sale price less what you paid.
If your sales of capital assets in a quarter bring in more than €1,000, you file a capital gains return by the 15th of the month after the quarter and pay by the 23rd.
Smaller amounts are declared by 15 January of the following year.
From 2026, crypto-asset service providers collect and report data on all their users.
Other investments are taxed like this:
Dividends: exempt if the company paid corporate tax in Latvia, or paid corporate tax or had tax withheld on the dividend abroad. Companies in the EU or EEA are treated as having paid. The exemption doesn't apply to companies in low-tax jurisdictions on Latvia's list, or to dividends from companies using the 15% corporate rate, which are taxed at 6%.
Interest and gains on shares and funds: 25.5%. Income from Latvian and other EU or EEA government and municipal securities is exempt.
Selling your home: exempt if you've owned it for more than five years and it was your declared residence for at least the 12 months in a row before the sale.
Pensions are taxed on the main scale, but with an allowance of €12,000 a year instead of €6,600. For a foreign old-age pension, you need to have reached Latvian state pension age. On a €34,800 pension (about US$40k), the tax is about €5,800, or 17% of the pension.
Latvia has no inheritance tax and no wealth tax, and inheritances aren't taxed as income. Gifts from your spouse or relatives up to the third degree are exempt, and gifts from anyone else up to €1,425 a year.
👉 State Revenue Service: income tax on capital gains, including virtual currency
Social security
Employees pay 10.5% social insurance and employers 23.59%, a total of 34.09%. Contributions are charged on earnings up to €105,300 a year. Above that, a 25% solidarity tax applies to the excess instead, and that's also where the 33% income tax band starts.
The self-employed pay 31.07% on their chosen insured amount (at least the minimum wage), plus 10% for their pension on the rest of their income. The rate is 29.36% for self-employed people who already receive an old-age pension.
If you work in Latvia for a foreign employer that has no presence there, your pay is still the base for Latvian contributions unless you stay covered by another country's system, for example with an EU A1 certificate.
👉 State Revenue Service: mandatory state social insurance contributions
👉 Law on State Social Insurance: the €105,300 cap (article 14) and rates (article 18) (in Latvian)
Double tax treaties
Does Latvia have double tax treaties? Yes. The Ministry of Finance lists 64 tax conventions in effect, including with the UK, the United States, Germany, Ireland, the Netherlands, Sweden, Estonia, Lithuania, Canada, Japan and the UAE. The treaty with Russia was terminated from 1 January 2024.
Treaties matter because the declared residence test can make you resident in two countries at once. The treaty's tie-breaker then decides, and the 15% rate isn't available if you end up resident elsewhere.
👉 Ministry of Finance: Latvia's tax conventions
The remote work visa
Latvia's digital nomad route is a long-term visa for remote work. It's for non-EU citizens who either work for an employer registered in an OECD country or are self-employed and registered in one. Russian citizens can't apply. You need:
income of at least 2.5 times Latvia's average gross monthly wage for the previous year, currently €4,213 a month (about US$4,850)
health insurance for your stay
proof of your job or business from the tax or social insurance authority of the OECD country
details of where you'll live in Latvia
The visa lasts up to one year, and you can ask for one more year. After the second visa ends, you have to wait six months before getting another on the same grounds. The visa doesn't give you the right to take a job with a Latvian employer.
👉 Office of Citizenship and Migration Affairs: long-stay visa for remote work
👉 Immigration Law of 20 August 2026: the remote work visa (articles 17 and 18) (in Latvian)
Who is Latvia good for?
How does Latvia compare for different kinds of mover? Ratings are relative to the 150+ countries TaxPilot covers, based on the 2026 tax year and the all-in cost including social insurance. They assume your pension and portfolio are held abroad.
☑️ Who is Latvia good for? Tax ratings for expats in 2026
Expat profile | Latvia rating | Why |
|---|---|---|
Employees | Poor | About 31% all-in on a US$100k salary (€87,000): 10.5% social insurance plus 25.5% income tax after the €550 monthly allowance. Just over the 30% line. The 15% remote work rate (about 24%) is limited to the visa, so it isn't counted. |
Freelancers (self-employed) | Poor | About 33% all-in on US$100k of profit: 31.07% social insurance on at least the minimum wage, 10% pension contributions on the rest, then 25.5% income tax. |
Retirees | Good | About 11% on a US$40k foreign pension plus US$20k of investment income. Pensioners get €12,000 a year tax free and most foreign dividends are exempt. No inheritance or wealth tax. About 20% if the income is interest. |
Crypto gains | Moderate | Crypto gains are taxed as capital gains at 25.5%, however long you've held them. |
Investment income | Good | About 13% on a US$1m portfolio yielding 4% income and 4% gains, if the income is dividends from companies that paid corporate tax or had tax withheld. Gains and interest are taxed at 25.5%. |
Digital nomad visa | Good | A remote work visa for employees of OECD employers or OECD-registered self-employed people earning at least €4,213 a month (about US$4,850). One year plus one more, with an optional 15% rate for your first 365 days. |
Filing and deadlines
The tax year is the calendar year. Employees have tax deducted through payroll, but you'll generally need to file an annual return if you have income that wasn't taxed at source, such as foreign income, self-employed profits or a foreign pension. The return for 2026 is filed through VID's Electronic Declaration System between 1 March and 1 June 2027. If your income was more than €105,300, the window is 1 April to 1 July.
Self-employed people pay by 23 June, or in three payments on 23 June, July and August if the bill is over €640. Social insurance is paid quarterly, by the 23rd of the month after each quarter.
Frequently asked questions
What is the 15% tax rate for digital nomads in Latvia?
If you hold Latvia's long-term visa for remote work, you can choose a flat 15% on income from remote work for an employer or your own business registered in another OECD country. It applies for 365 days from the day you become resident, without the usual allowances.
How do you become tax resident in Latvia?
You're resident if your declared place of residence is in Latvia, or if you stay 183 days or more in any 12-month period that starts or ends in the tax year. Latvian citizens employed abroad by the government are also resident.
What are the income tax rates in Latvia in 2026?
Annual income is taxed at 25.5% up to €105,300 and 33% above that, with an extra 3% on total income above €200,000. The first €550 a month is tax free, and pensioners get €12,000 a year tax free.
How is crypto taxed in Latvia?
Crypto is a capital asset, so gains are taxed at 25.5% whatever the holding period. If your sales of capital assets in a quarter bring in more than €1,000, you declare them quarterly. Otherwise you declare them by 15 January.
Are dividends taxed in Latvia?
Usually not. Dividends are exempt if the company paid corporate tax in Latvia, or paid corporate tax or had tax withheld abroad. Companies in low-tax jurisdictions are excluded, and dividends from companies using the optional 15% corporate rate are taxed at 6%.
Does Latvia have inheritance tax?
No. Latvia has no inheritance tax and no wealth tax, and inheritances aren't taxed as income. Gifts from close relatives are exempt, and gifts from others are exempt up to €1,425 a year.
Where to go next
👉 Easiest countries to become tax resident
Important information
This article is general information and does not constitute tax, legal, immigration or financial advice, and does not create a client relationship. Tax outcomes depend on travel history, income sources, treaty status and the law applying to the relevant year. Rates, thresholds and regimes change, and some measures described may be proposed rather than enacted; this article reflects our understanding as at the date of publication. Obtain advice from a suitably qualified professional before acting or refraining from action.
