Living in Latvia: 183-day residency requirement, tax of 25.5% up to €105,300 and 33% above that

According to the Latvian Tax Administration (VID), an individual is considered a resident of Latvia if their declared residence is in Latvia, or if they reside there for at least 183 days within any 12-month period that begins or ends in the tax year. The VID publishes a tax rate of 25.5% on annual income up to €105,300 and 33% on income exceeding that amount, with an additional 3% on the portion of annual income above €200,000. Capital gains, including dividends and capital gains, are taxed at 25.5%. The sale of real estate is exempt in several cases, including if the property has been held for more than 60 months.

This page reports on publications from the VID (Vietnam International Development Agency), the Latvian Ministry of Finance, and the texts of the Franco-Latvian convention. It does not deal with visas or residence permits.

Tax resident: declared residence or 183 days

The VID page on determining residency status (in Latvian, no publication date displayed) links residency to the "Taxes and Fees" law. A natural person is considered a resident in three cases:

1. his declared residence is in Latvia;
2. she stays in Latvia for 183 days or more in any 12-month period that begins or ends in the fiscal year;
3. She is a Latvian citizen and is employed abroad by the Latvian state.

The VID also checks whether the family has a permanent home abroad, whether the individual owns or rents property abroad, and whether they contribute to mandatory social security there. A person who is not a resident in one year is not treated as a resident the following year after leaving Latvia if their ties abroad are stronger than their ties to Latvia. To be recognized as a non-resident, an application must be submitted to the VID, including a specific date, supporting evidence, and a certificate of residence from the foreign administration.

When a tax treaty applies, the page lists the following order: permanent home, center of vital interests, habitual residence, nationality, then agreement of the competent authorities.

Income tax: 25.5 % then 33 %

According to the VID page on rates, a progressive scale applies to annual income:

The page does not include a year. The VID information document of 12/12/2024 ("Izmaiņas iedzīvotāju ienākuma nodoklī no 2025. gada") indicates that these rates apply from 2025 onwards and replace the previous rates of 20 %, 23 %, and 31 %. The rate of 3 % is calculated by the taxpayer in their annual tax return. The payroll deduction is 25.5 %, with a special rule for employees without Latvian social security contributions: the monthly portion exceeding €8,775 (one-twelfth of €105,300) is taxed at 33 %. The same document sets the tax-free minimum at €510 per month in 2025, €550 in 2026 and €570 in 2027, and eliminates the variable minimum based on income.

Dividends, interest and capital gains: 25.5 %

The VID page on rates includes capital income at 25.5% (%), dividends, bank interest, life insurance policies, private pension fund investments, and individual financial instrument management. The VID page on capital gains indicates that the rate is 25.5% (%). The gain is the sale price less the acquisition cost and any investments made during the holding period. Eligible assets include real estate, stocks, fund units, debt securities, businesses, intellectual property, investment gold, and cryptocurrencies.

For certain operations initiated no later than December 31, 2024, and not completed by that date, the rates page indicates a rate of 20 % for 2025, 2026, and 2027, subject to a declaration. Its wording regarding the completion date is unclear: this should be verified with the VID.

For dividends paid to individuals by a company that has chosen the alternative corporate tax rate of 15 %, the Ministry of Finance indicates, as of January 1, 2026, an income tax of 6 % on these dividends.

For capital gains, residents whose quarterly income exceeds €1,000 must file a quarterly declaration before the 15th of the following month and pay before the 23rd. Below this threshold, the declaration must be filed before the following January 15th, with payment before January 23rd.

Real estate: exemption from sale and property tax

The Ministry of Finance's page on non-taxable income (no date displayed) exempts income from the sale of real estate in several cases, including:

• the property has been held for more than 60 months since its registration in the land register and has been the seller's declared residence for at least 12 months prior to the sales contract;
• the property has been held for more than 60 months and has been, for the last 60 months, the seller's only real estate property;
• the property was the seller's only asset and the proceeds are reinvested in a functionally similar asset within 12 months before or after the sale;
• cases related to the division of property during a divorce and to expropriation for public needs.

For property received by gift or inheritance from a relative up to the third degree, the ministry indicates that, as of January 1, 2025, the property is deemed to have been held since its registration in the name of the donor or the deceased.

Latvian property tax is based on the cadastral value as of January 1st. The VID page states:

The page specifies that local authorities set the rates by regulation, and that a rate higher than 1.5 % applies only to unmaintained properties. The layout makes it difficult to read the field for each rate with certainty: this should be verified with the VID (Validation of Debts and Taxes). Notices are sent before February 15th; payment is quarterly, on March 31st, May 15th, August 15th, and November 15th.

Inheritance and gift

The Ministry of Finance's page on non-taxable income classifies inheritance income as exempt, without specifying any conditions. Gifts from individuals are exempt within the limits set by law, which the page does not detail. It does not describe inheritance tax. This point is not discussed in detail here.

Social security contributions in 2026

For 2026, CLEISS gives a contribution of 10.50 % of gross income for the employee and 23.59 % for the employer, under an annual ceiling of €105,300.

Coordination with the Franco-Latvian convention

The convention was signed in Paris on April 14, 1997, and entered into force on May 1, 2001; it applies to withholding taxes from January 1, 2002, according to the French Official Tax Bulletin (BOFiP). The BOFiP also notes the effect of the multilateral convention, with a general rule against abuse and a most-favored-nation clause triggered by the Latvian-Japanese convention. For dual residence, Article 4 applies the criteria of permanent home, center of vital interests, habitual residence, and then nationality, according to the explanatory memorandum submitted to the Senate.

Our dedicated page provides details of the agreement.

What this page does not cover

This section does not cover visas and residence permits, property acquisition by foreigners, or any special tax regimes for new residents: the pages reviewed do not address these. It also does not cover the annual income tax filing deadline, which is not specified on the pages reviewed. Balmont Conseil is neither a law firm nor a local tax advisor: local tax matters should be reviewed with a professional based in Latvia. French tax issues, such as departure declarations, account declarations, and exit tax, are addressed in our section on tax residency.

What changes depending on your situation

• Your declared residence and the number of days you have been present in Latvia.
• The nature of your income: salaries, dividends, interest, life insurance, capital gains.
• The date of acquisition and the use of your property (residence, sole property, length of ownership).
• The applicable convention and the status of beneficial owner of the income.

The rule depends on your situation. No results are guaranteed.