Individual income tax in Latvia is structured on a progressive rate system. This article provides a detailed overview of the current tax framework for Latvian resident individuals as of 2025, covering income brackets, tax rates, and applicable surtaxes.
Latvia’s Individual Income Tax Framework
Latvia applies a progressive income tax system to individual earnings, meaning that higher income levels are taxed at increased rates. The assessment is based on the total annual income of the taxpayer.
Income Tax Rates and Brackets (2025)
The following table summarizes Latvia’s individual income tax brackets and rates for the 2025 tax year:
| Taxable Income Bracket (EUR) | Tax Rate (%) |
|---|---|
| €0 – €105,300 | 25.5% |
| Over €105,300 | 33% |
There is no fixed rate for all income levels; instead, each bracket is taxed according to its respective percentage. The rates apply to annual income for Latvian residents assessed in euros (EUR).
Surtaxes on High Income
In addition to the main progressive rates, Latvia imposes a surtax on very high incomes. For 2025, a 3% surtax is levied on the portion of an individual’s total annual income that exceeds €200,000. The main brackets and surtax threshold are shown below:
| Condition (Annual Income in EUR) | Surtax Rate (%) |
|---|---|
| Above €200,000 | 3% |
This means that income earned above €200,000 is subject to the marginal rate (either 33% or, in effect, 36% if the surtax applies), which significantly affects high-earning residents.
Tax Base and Calculation
The individual income tax in Latvia is assessed on the total income earned by a resident during the calendar year. The taxable base includes salary, income from business activities, and other qualifying individual earnings. It’s important to note that certain types of income, allowances, credits, or deductions are subject to separate rules and are not detailed in this overview due to unavailable data.
Comparison Table: Latvia’s Individual Income Tax Structure (2025)
| Type | Assessment Basis | Main Tax Rates (%) | Surtax Condition | Surtax Rate (%) |
|---|---|---|---|---|
| Progressive | Income | 25.5% / 33% | Annual income > €200,000 | 3% |
Current public data does not specify additional flat or variable surcharges beyond those outlined above. No information on minimum or maximum holding periods for specific incomes has been disclosed by Latvian authorities for the 2025 tax year.
Pro Tips: Navigating Latvia’s Income Tax in 2025
- Structure financial affairs to avoid exceeding key income thresholds where possible; incremental income above €105,300 and €200,000 is taxed at higher marginal rates.
- Review tax residency status and total annual income sources for comprehensive tax liability management under Latvia’s progressive framework.
- Track annual earnings carefully, as the 3% surtax applies solely to the portion of income above €200,000, not your full income base.
- Consult official resources or professional advisers on deductions or credits to optimize your final taxable amount.
Official Information Sources
For further details, reference the official Latvian Ministry of Finance website. This is the most reliable starting point for updated income tax regulations, forms, and public guidance.
In summary, Latvia’s individual income tax system for 2025 features a progressive structure with key rate increases at the €105,300 and €200,000 annual income marks. The applicable rates and surtaxes, while typical for Northern Europe, highlight the importance of income planning for residents. Understanding these inflection points is critical for optimizing your taxable position throughout the year.