Latvia

Research notes

Latvia — family-office tax dossier

Last reviewed: 2026-10-16 Tax year: 2026 Reviewer: research agent (Claude), unreviewed by a tax adviser

Summary

Capital gains taxed at 25.5% (from 2025) plus a 3% surtax on income above EUR 200k; foreign and domestic dividends that were taxed at source are PIT-exempt (but count for the 3% surtax); no inheritance, gift-to-children or wealth tax. Companies pay 20/80 CIT only on distribution.

Residence and eligibility

• Tax residence: Resident if the declared place of residence is in Latvia, or present 183 days or more in any 12-month period, or a Latvian citizen employed abroad by a Latvian employer.
• EU/EEA free movement (EU): Register residence; EU citizen right of residence.
• Temporary residence permit via real estate (US, OTHER): Real estate of total value at least EUR 250,000 (one property in Riga/Jūrmala/listed municipalities; up to two elsewhere), cadastral value at least EUR 80,000 or appraisal; 5% of purchase price paid to the state budget with the first application. Other Immigration Law Section 23 routes (company capital, bank deposit, state bonds) not verified.

Capital gains

• Rule in force: Capital gains on shares, funds, bonds, real estate and crypto are taxed at 25.5% (since 1 Jan 2025, up from 20%), plus the 3% additional rate on total annual income above EUR 200,000, so 28.5% at the margin for a large gain.
• Exemptions/thresholds: Latvian real estate: exempt if held 60 months and declared primary residence for 12 months, or held 60 months as the only property, or proceeds reinvested in a like property within 12 months. Capital losses offset capital gains (crypto separately).
• Conditions: Investment account (ieguldījumu konts): income is taxed only when withdrawals exceed deposits (PIT Law Section 11.9(11)(6) and the rule that follows it), so a listed portfolio can be rolled over without tax until money is taken out.
• Holding periods: Securities: none. Latvian real estate: 60 months for the residence/sole-property exemption.
• Foreign assets: Worldwide gains taxed; foreign tax credited up to Latvian tax on that income.
• Trader risk: No specific recharacterisation regime found; business income of a self-employed person is taxed at progressive rates (25.5%/33%) plus social contributions.
• Exceptions, reforms, announced changes: Transactions begun but not completed by 31 Dec 2024 and notified to the SRS remain at 20% in 2025-2027. Section 15(5) of the PIT Law: 25.5% on income from capital, including capital gains. Section 15.1 (in force 1 Jan 2026 wording): an additional 3% on the excess of total annual income over EUR 200,000, payable through the annual return; the base expressly includes taxable income 'including capital gains and income from capital' and the dividends and liquidation quotas exempted by Section 9(1)(2.1)-(2.2).
• Confidence: high, verified.
• JSON: headline 28.5%; listed domestic 28.5%, listed foreign 28.5%, private business 28.5%, local real estate 28.5%, foreign real estate 28.5%. Basis: 25.5% capital income rate + 3% additional rate on income above EUR 200k = 28.5% for a large gain; no holding-period relief except the main-home/sole-property exemption. Investment account can defer tax on listed portfolios.

Verified 2026-10-15 in the PIT Law (likumi.lv): Section 15(5) 25.5% on capital income incl. gains; Section 15.1 3% additional rate on total annual income above EUR 200,000, base expressly including capital gains and exempt dividends. JSON 0.285 confirmed; confidence raised to high.

Dividends

• Rule in force: Dividends are exempt from PIT when CIT was paid on the distributed profit in Latvia, or when CIT (or an equivalent tax) was paid abroad or PIT/WHT was withheld abroad on the dividend (PIT Law Section 9(1)(2.1)); otherwise taxed at 25.5%. Tax-haven dividends are always taxed. Even exempt dividends count toward the 3% additional rate on income above EUR 200,000 (Section 15.1(2)).
• Exemptions/thresholds: Exemption needs evidence of foreign CIT or WHT (EU/EEA companies generally excepted from proof, but SRS may ask).
• Exceptions, reforms, announced changes: Ordinary foreign portfolio dividends that suffered source WHT (e.g. 15% US treaty WHT) or come from a company that paid CIT abroad are exempt, not taxed at 25.5% with a credit: the statute settles the conflict with a broker article (TWINO) that described a credit method. An additional 3% PIT applies to the part of total annual income above EUR 200,000, and the base includes exempt dividends. From 2026 Latvian companies wholly owned by individuals may opt into a 15% CIT + 6% PIT dividend regime.
• Confidence: high, verified.
• JSON: headline 28.5%, domestic 3%, foreign gross 3%, relief method 'exemption'. Basis: 0% PIT on dividends from taxed profits/with foreign WHT, plus the 3% additional rate for a family whose income exceeds EUR 200k = 3%. Headline 28.5% = 25.5% + 3% for dividends not meeting the condition (e.g. tax havens).
• Outbound withholding: Latvian companies pay 20% CIT on gross distributions (20/80); no WHT on dividends to non-resident companies except tax-haven residents (20%).
• Treaties: 64 effective double tax treaties (PwC).
• Holding companies: Modelled as the structure regime 'sia_holding' (see Holding structures): a Latvian SIA pays no tax on dividends or gains it keeps; 20% of the grossed-up distribution (25% of the net amount) is due when it distributes, and the shareholder's dividend is PIT-exempt but counts toward the 3% additional rate above EUR 200,000 a year.

Verified 2026-10-15: Section 9(1)(2.1)(b) exempts dividends where CIT was paid abroad or tax was withheld abroad, so foreign portfolio dividends are exempt (not 25.5% with credit); only the 3% additional rate applies above EUR 200,000. Confidence raised to high.

Inheritance and gifts to children

• Rule in force: No inheritance tax and no gift tax for children. Heirs pay a Land Register state fee only on inherited Latvian real estate: 0.25% for children who lived with the deceased, 0.5% for other children; no fee on movable property such as securities.
• Exemptions/thresholds: No state fee if the inherited real estate is worth less than ten minimum monthly wages.
• Foreign assets: No tax; the state fee only concerns Latvian real estate.
• Exceptions, reforms, announced changes: other_transfer_cost_rate set to 0 because the fee (0.25-0.5%) applies only to Latvian real estate, a small share of a portfolio estate.
• Confidence: high, verified.
• Gifts: Gifts from individuals are PIT-taxable above EUR 1,425/yr, but gifts between spouses and relatives up to the third degree are fully exempt.
• Business relief: Not applicable.
• Domicile/scope: Not applicable.
• JSON: basis 'none', children 'fully_exempt', exemption 0 EUR, brackets none, other transfer cost 0%.

Wealth tax

• Rule in force: No net wealth tax and no recurring levy on financial assets.
• Confidence: high, verified.
• Property taxes (not a wealth tax): Municipal immovable property tax on land and buildings; rates are set by municipalities (not researched in detail).
• JSON: type 'none'.

Special regimes

None. No special tax regime for newly arriving wealthy individuals was found; only ordinary residence (JSON regime 'standard').

Company taxation (kept separate from personal tax)

• Headline CIT 20%. 20% CIT on distributed profits, applied to the gross-up (net/0.8), i.e. 25% of net distribution; retained profits untaxed. From 2026 an optional regime for companies owned only by individuals: 15% CIT on net/0.85 plus 6% PIT withheld.

Holding structures

Modelled: Latvian holding company (`sia_holding`, type `structure`). A sabiedrība ar ierobežotu atbildību (SIA) owned by the parents holds the portfolio.

• Company tax: only on distributed or deemed-distributed profit, 20% of the grossed-up amount (net / 0.8), i.e. 25% of the net amount (PwC, reviewed 30 June 2026). Retained dividends and gains are untaxed. JSON: gains rates 0, dividend rates 0, credit 'none'.
• Personal side: a dividend from profit on which Latvian company tax was paid is PIT-exempt (PIT Law Section 9(1)(2.1)(a)), but it counts toward the additional 3% on a person's total annual income above EUR 200,000 (Section 15.1(1),(2)(2)). JSON payout_tax_rate 0.224 = 0.20 company tax + 0.03 x 0.80 on the net dividend, at the top marginal rate; a couple sharing a EUR 400,000 net payout sits at the threshold per person, and the threshold is not indexed.
• Wealth tax and inheritance: not given in the structure regime, so they inherit the standard values (none; inheritance exempt under PIT Law Section 9(1)(9)). Shares in the SIA pass without tax; Latvia has no deemed disposal at death.
• Alternative not modelled: since 1 January 2026 an SIA owned only by individuals may opt for 15% company tax on net/0.85 plus 6% PIT withheld (PIT Law Section 15(5.1); Corporate Income Tax Law Article 4.2). Per EUR 100 received it costs about 28.3 against 28.0 for the standard route if the 3% rate also applies; the Corporate Income Tax Law text and the SRS explanation were not opened.
• Investment account: not modelled (engine cannot express it): PIT Law Sections 11.9(12.2) and 11.13 tax only withdrawals above deposits, deposits in cash only (Section 11.13(4)).
• Funding: contributing an existing portfolio in kind is a disposal for the individual; cash or newly bought positions avoid it. Running cost of the SIA not sourced. A private foundation or trust was not researched.

Cost of living notes

City: Riga.

• Prime family-home rent (monthly): EUR 2,200 (2026). Median asking rent of 15 distinct houses of 180-500 m² for long-term rent in Riga (Mežaparks, Bieriņi, Imanta, Vecāķi, Torņakalns, Centre, Jaunciems) on SS.lv, all listing pages, 15 Oct 2026; range EUR 1,100-4,840 (Mežaparks EUR 2,000-4,500). Small sample; Jūrmala excluded. Checked 2026-10-15 against the upper-middle-class standard. Source: SS.LV Houses, cottages - Riga, Hand over, https://www.ss.lv/en/real-estate/homes-summer-residences/riga/all/hand_over/
• International school (annual, per child): EUR 20,900 (2026). International School of Riga, Grades 9-12, 2026/27: tuition EUR 19,400 plus yearly capital fee EUR 1,500 (EUR 2,000 for new students). New students also pay a one-time EUR 1,600 membership fee. Source: Tuition & Fees (2026/27), https://isriga.lv/admissions/tuition-fees/

Prime purchase price per m², family health insurance and housekeeper cost were not sourced in this round and are omitted rather than guessed.

Open questions

• Exact conditions for an account to qualify as an investment account (e.g. foreign brokers) not summarised here.
• Whether the SRS demands proof of foreign CIT/WHT for every portfolio dividend in practice.
• Notary fees for the inheritance case not verified.

• Holding structures: SIA modelled; the optional 15%/6% regime and a private foundation or trust are not modelled (see Holding structures).
• Needs an engine change: the investment account (see Holding structures); the tax file models gains as taxed when realised.

Sources

• Latvia - Individual - Income determination
• Latvia - Individual - Taxes on personal income
• Investment taxes in Latvia: what to know about capital gains and income (Mar 2026)
• Par nodokļa piemērošanu individuālajā situācijā (VID answer on dividend taxation, 2025)
• Latvia - Individual - Foreign tax relief and tax treaties
• Latvia - Individual - Other taxes
• Successions in Europe - Latvia
• Latvia - Individual - Residence
• Real estate owner (temporary residence permit)
• Latvia - Corporate - Taxes on corporate income
• Latvia - Corporate - Withholding taxes
• Likums 'Par iedzīvotāju ienākuma nodokli' (consolidated, likumi.lv): https://likumi.lv/ta/id/56880-par-iedzivotaju-ienakuma-nodokli
• SS.LV Houses, cottages - Riga, Hand over: https://www.ss.lv/en/real-estate/homes-summer-residences/riga/all/hand_over/
• Tuition & Fees (2026/27): https://isriga.lv/admissions/tuition-fees/

Change log

• 2026-10-15: initial research.
• 2026-10-15: confirmed from the PIT Law the foreign-dividend exemption (Section 9(1)(2.1)) and the scope of the 3% additional rate (Section 15.1: includes capital gains and exempt dividends); capital_gains and dividends now high/verified; added Riga cost of living (SS.LV rent sample, ISR 2026/27 fee).
• 2026-10-15: family rent re-checked against the upper-middle-class standard: kept.
• 2026-10-16: added the holding structure regime sia_holding (Latvian SIA: no tax on retained dividends and gains, 20/80 on distribution, payout rate 0.224 incl. the 3% additional rate on the exempt dividend); re-read PIT Law Sections 9(1)(2.1),(2.2),(9), 11.9, 11.13, 15(5), 15(5.1), 15.1 on likumi.lv (no change to the standard regime); wrote the projection recipe data/recipes/LVA.json.