Planned Latvian tax changes as of 2026

Personal Income Tax (PIT) 

As of 1 January 2026 the minimum monthly wage is planned to increase from EUR 740 to EUR 780. 
 
As of 1 January 2026 the non-taxable minimum is planned to increase from EUR 510 to EUR 550 per month. 

Value added tax (VAT) 

As of 1 January 2026 it is planned to increase the VAT rate for books, magazines and other press publications that are not in Latvian or in the official languages of the European Union member states, candidate countries or the Organisation for Economic Co-operation and Development member states from 5% to 21%. 
From 1 July 2026 until 30 June 2027 it is planned to reduce the VAT rate for one year to 12% for essential food products – bread, milk, eggs and fresh poultry meat. 
 

Corporate income tax (CIT) 

As of 1 January 2026 it is planned to introduce an alternative tax regime for companies whose shareholders are only natural persons. When distributing profits as dividends, such companies will be able to choose a split income tax system – applying CIT rate of 15% (gross) and PIT rate of 6%. 
 
Starting from 2028 it is planned to ease CIT restrictions related to interest payments – the limitations on interest payments will no longer apply to public-private partnership projects, publicly traded securities and financing from licensed European financial service providers. 
 

Transfer Pricing (TP) 

Latvian Government has adopted amendments to the Law “On Taxes and Duties” in the final reading, with the aim of revising transfer pricing documentation requirements. These changes are intended to reduce the administrative burden for taxpayers while maintaining the State Revenue Service’s (SRS) ability to effectively monitor transfer pricing risks. 
Until now, the transfer pricing documentation requirements in Latvia have been relatively strict, creating additional costs for companies and, in some cases, reducing Latvia’s attractiveness in the eyes of investors. 
 

Key developments 

• Threshold for global documentation 
  The threshold for preparing global (master file) documentation at the level of a multinational group is increased from EUR 15,000,000 to EUR 20,000,000. 
• Local documentation 
  The threshold for local file documentation remains unchanged, with the existing criteria being preserved. 
• Submission of documentation 
  Both global and local transfer pricing documentation will in future only have to be submitted upon request of the SRS, rather than automatically by specific deadlines. This means that the documentation will still need to be prepared, but its submission will be linked to SRS control activities. 
• Transaction threshold for documentation 
  The value threshold from which a particular controlled transaction must be reflected in the transfer pricing documentation is increased from EUR 20,000 to EUR 90,000. 
• Controlled transaction report 
  A new element is introduced – the controlled transaction report, which will be a structured summary of controlled transactions. 
   

A controlled transaction report must be prepared and submitted if: 

• in the reporting year, the total amount of controlled transactions exceeds EUR 250,000
• the report must be submitted via the SRS Electronic Declaration System (EDS) within 12 months after the end of the reporting year 
• the report must contain structured information, including: 
  
  • data on transaction counterparties 
  • types, directions and amounts of transactions 
  • methods used for determining arm’s-length prices (values) 
  • other indicators necessary for the SRS to assess transfer pricing risks 

SRS EDS classifiers will be used for data submission, enabling the automation of transfer pricing risk analysis and more targeted selection of transactions for detailed review. 
 

Application and timelines 

• The new rules will apply to transactions commenced on or after 1 January 2025. 
• The first controlled transaction reports will have to be submitted by 31 December 2026. 
• The amendments to the law are intended to enter into force on 1 January 2026. 
   

Gambling and lotteries taxes 

As of 1 January 2026 it is planned to increase the gambling tax as follows: 

• for slot machines – from EUR 6 204 to EUR 7 440 
• for roulette, card and dice games – from EUR 33 696 to EUR 40 440 
• for games of chance by phone, totalizators and betting – from 15% to 18% 
• for bingo – from 10% to 12% 
• for interactive gambling – from 12% to 15% 
   

Excise duty 

As of 1 March 2026 it is planned to increase the excise duty on alcoholic beverages by EUR 15 per 100 litters of absolute alcohol. 
 
In 2026 and 2027 it is planned to gradually increase the excise duty rates on tobacco products, heated tobacco, tobacco leaves, liquids used in electronic smoking devices and their preparation components, as well as tobacco substitute products (excluding cigars, cigarillos, and the liquid and its components used in electronic smoking devices in 2026). 
 

Natural resources tax (NRT) 

Starting from 2027 the NRT rate for peat will be raised to EUR 3.50 per tonne. 
 
Starting from 2027 the NRT rate for sand and sand-gravel will be increased by 25%. 
 
Starting from 2027 the NRT rate of EUR 75 per cubic meter will be introduced for unprocessed wood obtained in Latvia for commercial purposes, which has not been processed into wood products and is exported outside the European Union. 
 

Electronical Declaration System (EDS) 

As of 1 January 2026, access to the SRS Electronic Declaration System (EDS) will only be possible using a secure electronic identification tool. 
 
Non-residents will continue to be able to log in using a username and password. 
 
It is important to note that, starting from 2025, the password must be changed at least once every 90 days. 
 
  
If you have any questions, please do not hesitate to contact us