The following overview details the corporate tax regime in Latvia as applicable to companies in 2025. You will find key information regarding Latvia’s flat corporate tax rate, special rules for certain sectors, and important notes on recent legislative changes affecting credit institutions.
Latvian Corporate Tax Rate: Core Information for 2025
Latvia applies a flat corporate tax rate to companies, which is characterized by its lack of progressivity and simplicity.
| Tax Type | Assessment Basis | Rate (%) | Currency (EUR) |
|---|---|---|---|
| Corporate Income Tax | Corporate | 20% | € (EUR) |
This flat 20% rate applies broadly to company profits, without further progression or bracket structures. No public information is available regarding minimum or maximum holding periods in this context.
Surtaxes for Credit Institutions and Financial Sector: 2025 Update
Certain financial sector entities face additional fiscal obligations beyond the standard regime. There are two main categories of surtaxes to consider in Latvia for 2025:
| Surtax Rate (%) | Who Pays? | Application Period | Specific Condition |
|---|---|---|---|
| 20% | Credit institutions and consumer crediting service providers | Annual (from 2024 onward) | Payable each year regardless of profit distribution |
| 60% | Latvian-registered credit institutions & branches of foreign credit institutions | 2025–2027 | Applied to increase in net interest income exceeding the 2018–2022 average by more than 50% |
The 60% surtax—described as a solidarity contribution—is extremely specific and only applies to net interest income growth exceeding historical averages, targeting select financial actors with substantial interest income expansion in the coming years.
No Bracketed Rates or Regular Surtaxes for General Companies
For companies outside of those specified financial sectors, the flat 20% corporate tax holds. There are no recorded bracketed rates or broad-based surtaxes disclosed in official information at this time.
Compliance and Assessment Basis
Latvia uses a corporate-based assessment, meaning tax is directly levied on business profits (corporate earnings), and not on individual shareholders. This remains consistent across all registered corporate entities, with no disclosed exceptions for holding periods or specific time-based exemptions.
Key Figures and Summary Table for 2025
| Category | Rate (%) | Currency (EUR) | Year of Application | Notes |
|---|---|---|---|---|
| General Corporate Tax | 20% | € | 2025 | Flat rate. No brackets. |
| Surtax – Credit Institutions (general) | 20% | € | 2024 onward | Payable annually regardless of distributions |
| Solidarity Surtax – Net Interest Income | 60% | € | 2025–2027 | On growth exceeding benchmarked period (2018–2022) |
Pro Tips for Navigating Latvian Corporate Tax in 2025
- Always review the latest legislation annually, as special regimes for financial service providers can shift on short notice.
- If operating in or entering the financial sector, examine how annual net interest income compares to the 2018–2022 baseline to anticipate solidarity contributions.
- Corporate structures outside the credit sector face no hidden bracketed rates—this simplicity can support efficient tax planning.
- Ensure early compliance and reporting: Latvia’s regime is straightforward for most companies, but failure to account for sector-specific surtaxes may result in significant additional tax due.
- Consult official Latvian tax resources for ongoing changes: https://www.vid.gov.lv/
Sources
In summary, Latvia’s corporate tax structure is notable for its flat 20% rate, ease of assessment, and the presence of significant sector-specific surtaxes in 2025. The sharp additional tax on credit institutions’ income growth is a targeted measure, while most companies will benefit from the predictability of a non-progressive rate. Staying current with special regimes is essential, particularly for those in regulated industries, and relying on official resources is the best way to ensure compliant operations in Latvia this year.