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Home / Taxes / Personal Income Tax
Personal Income Tax

Personal income tax is calculated and paid into the budget:

  • payroll tax (of taxpayer) - by employer;
  • on income set out in the tenth and twelfth Paragraph of Article 17 of the law "On Personal Income Tax" - by disbursing entity;
  • from the income set out in the first part of Paragraph 3 of Article 1 of the law "On Personal Income Tax" as well as from patent fees - by taxpayer;
  • if the taxpayer is employed by an employer who is a foreign taxpayer the payroll tax is paid by the employer or by the taxpayer in accordance with the Cabinet of Ministers regulations;
  • payroll tax of such taxpayers whose salary is paid from the funds of foreign aid or loans received from international financial institutions - by employer or by the taxpayer themselves in accordance with the Cabinet of Ministers Regulations (first paragraph of Article 4 of the law "On Personal Income Tax").

Personal income tax payers with the exception of individuals set out in Article 20 of the law "On Personal Income Tax" shall pay their tax amounts totalled as per the tax return. There are also the tax advance payments executed during the taxation period (second paragraph of Article 4 of the law "On Personal Income Tax").

Domestic taxpayers who have within the taxation period received income in the Republic of Latvia from which the tax has been deducted at disbursement, and, furthermore, if the total amount of his received non-taxable income provided in the first paragraph of Article 9 of this law does not exceed four amounts of the minimum non-taxable limit defined for the current taxation year, shall have the right for non-submission of the tax return if not otherwise provided in this or in other laws. The said provision applies also to occasions when domestic tax payers have within the year of taxation received income only in the Republic of Latvia from which the tax has been deducted at disbursement or only the non-taxable amounts of income provided in the first paragraph of Article 9 of this law the total amount of which does not exceed four amounts of the minimum non-taxable limit defined for the current year.

If domestic taxpayers have failed to submit the tax return within the term defined in fifth paragraph of Article 19 of this law this shall be considered as a confirmation of the fact that the tax has been deducted in full amount from the income received by them in the relevant year of taxation and that he has not received the amount of minimum non-taxable limit of income provided in first paragraph of Article 9 of this law the total amount of which did not exceed four amounts of the minimum non-taxable limit defined for the current year. In case any facts come to the attention of the SRS that taxpayers during the taxation year have received taxable income from which there have been no tax amounts deducted at disbursement or if taxpayers have not submitted their tax returns in cases when the total amount of their non-taxable income provided in Article 9 of this law has exceeded four amounts of the minimum non-taxable limit defined for the current year the sanctions mentioned in the first paragraph of Article 32 are applied to them in case of non-submission of the tax return.

Foreign taxpayers (non-residents) shall not be obliged to submit the tax return except in cases if non-residents:

  • receive income mentioned in paragraphs 7 and 9 of part three of Article 3 of this law as well as income mentioned in paragraph 1 of part three of Article 3 from performance of salaried jobs in favour of employers that are not residents of Latvia or that do not have a permanent representation in Latvia, or that receive income under paragraph 4 of part three of Article 3 of this law from non-residential business companies in Latvia;
  • receive income mentioned in paragraph 7¹ of part three of Article 3 of this law from physical persons that are not mentioned in part12² of Article 17 of this law;
  • who by being residents of another European Union member state have gained more than 75% of their total income in Latvia and have selected to use the amount of the minimum non-taxable limit pursuant to Article 12 of this law, the tax relief available pursuant to the fourth paragraph of Article 13 and the amount of deductible expenses pursuant to the fourth part of Article 10 of this law;
    tax relief mentioned in this Article shall not be applicable to taxpayers who gain income from business activities (article 20 of the law "On Personal Income Tax").

Payroll tax deduction and payment(transfer to the budget) is performed by employers of employees - (tax) payers (first paragraph of Article 17 of the law "On Personal Income Tax").

Employers shall pay the amounts of payroll tax to the state budget once a month when cash is received in the bank for payment of the personal income amounts. Employers who are paying personal income tax from revenue received in cash without receiving the cash on their bank accounts shall pay the payroll tax to into the budget on the next day after salary disbursement (fifth paragraph of Article 17 of the law "On Personal Income Tax").


Employers shall submit reports on any personal income tax amounts deducted from the income of employees and paid into the state budget at the local offices of the State Revenue Service according to their official address in the term defined for submission of the reports on statutory social insurance contributions by employers pursuant to the law "On State Social Insurance" (fourth paragraph of part one of Article 29 of the law "On Personal Income Tax").

Employers shall make respective entries of the amounts disbursed to employees during taxation period as well as of the estimated and paid amounts of tax in their personal payroll tax booklets. At the end of the year employers shall hand out this information to employees as well as send it to the local office of the State Revenue Service defined according to the place of location of employers statements on payroll tax amounts paid over the period of any existing employment relations.

Statement on payroll tax payments is delivered to the recipient no later than by February 1st of the year following the taxation year if employment relations have existed until the end of the year. If employment relations have been terminated before the end of the year employer shall make the respective entry in the personal payroll tax booklet and hand out the booklet o the employee on the day of dismissal. If employment relations with employees employed for extra jobs have been terminated before the end of taxation period employers shall issue the statement on payroll tax on the day of dismissal, but for employees employed for urgent, short-term or one-off jobs - on disbursement of salary. Payroll tax statements of those employees with whom the employment relations have not lasted until the year end employers shall send to the local office of the State Revenue Service according to the place of location of employers until the fifteenth date of the month following the month of termination of employment relations or the month in which employees have been employed for performance of urgent, short-term, one-time jobs (seventh paragraph of Article 17 of the law "On Personal Income Tax").

Natural persons shall in accordance with paragraphs 4 and 5 of part one of Article 4 shall individually calculate the payroll tax from their salary income and pay into the state budget if they are:

  • employed by employers that are foreign companies (non-residents) without representative office in Latvia;
  • employed by foreign diplomatic and consular representations in Latvia (refers to local personnel of such representations);
  • receiving remuneration pursuant to employment contract that is paid either from the funds of foreign aid or loans received from international financial institutions;
  • employed by employers who are natural persons - foreign taxpayers.

Therefore these natural persons shall register themselves with at the local office of the State Revenue Service according to their place of residence before the end of month following the month in which the respective natural person has been employed by employers mentioned in paragraphs 4 and 5 of the first part of Article 4 of this law and shall pay the payroll tax on the amount of salary received in the respective calendar month within the deadline set out in paragraph 9.1 of Article 9 of the law. Upon registration as payroll tax payers the physical persons shall present the contract signed with the employer.

Upon making the payroll tax payment for the first time these natural persons shall pay the amount of tax for the period when they have been employed and for the following month. The amount of tax calculated on the salary received in each calendar month shall be credited to the state budget no later than on the fifteenth date of the month following the month of disbursement.

These natural persons shall upon calculation of the payroll tax amount assess the taxable amount of income as the difference between income from salaried jobs pursuant to the Cabinet of Ministers Regulation NR 112 "Regulation on Income Taxable with Payroll Tax" of March 31, 1998, and the amount of monthly non-taxable limit of income, any tax relief amounts and the amount of statutory social insurance contributions calculated for the current month.

However, if employers who are non-residents have a representative office in Latvia the payroll tax shall be in the general order calculated and paid into the state budget by the employer (its representative office).

In cases when natural persons who are permanent residents of Latvia are employed by employer who is a foreign taxpayer and if the individuals mentioned above work in favour of their employer outside Latvia then these individuals on any amounts of income earned during the year of taxation from to their employment by the foreign employer shall in the term and procedure defined in the law submit their annual income returns.

Statement on the amount of payroll tax calculated and paid into the state budget shall be submitted by the said natural persons - employees to the local office of the State Revenue Service by February 1st of the year following the taxation year, however, if employment relations with this employer have been terminated before the end of the year - before the fifteenth date of the month following the end of employment.

Physical persons - employees shall from March 1st till June 1st of the year following the taxation period submit to the territorial institution of the State Revenue Service according to their place of residence with the documents enclosed evidencing the payment of taxes into the state budget (fifth paragraph of Article 9 and paragraph 9.1 of Article 17 of the law "On Personal Income Tax").

From the amount of income of natural persons paid by enterprises (business companies), permanent representative offices of foreign companies (non-resident), institutions and organisations if they are not bound by employment relationship and have not been exempt from taxation the entity disbursing the income shall deduct the amount of tax at disbursement and pay into the state budget no later than on the fifth date of the next month following the disbursement.

Types of income that is not bound by employment relationship and is not exempt from taxation have been set out in the tenth paragraph of Article 17 of the law "On Personal Income Tax".

Enterprises, business companies, institutions, organisations and permanent representative offices of foreign enterprises (non-residents) shall issue statements to individuals who are taxpayers on any amounts disbursed that are taxable with the personal income tax and that are not bound by employment relationship and the amount of tax deducted on these amounts and shall send the statements to the local office of the State Revenue Service according to their location no later than before the fifteenth date of the month following the disbursement of income (sub-paragraph 1 of the eleventh paragraph and the tenth paragraph of Article 17 of the law "On Personal Income Tax").

On income of natural persons paid by enterprises, business companies, institutions, organisations and permanent representative offices of foreign enterprises (non-residents) without deduction of tax at disbursement the entity disbursing the income shall send statements to the local office of the State Revenue Service by the fifteenth date of the month following the end of each quarter. The statement for Quarter IV shall be submitted by February 1st of post-taxation year and documents proving the disbursement are issued to recipients of income (on request by the income recipient the disbursing entity shall also issue a statement on any taxable amounts of income that are not bound by employment relationship).

If the amount of income disbursed is not taxable enterprises, business companies, institutions, organisations and permanent representative offices of foreign enterprises (non-residents) shall issue to individuals who are recipients of income documents evidencing the disbursement and also send statements to the territorial institution of the State Revenue Service according to their place of location on any non-taxable amounts of income before February 1st of the post-taxation year (sub-paragraph 2 of the eleventh paragraph of Article 17 of the law "On Individual Income Tax", paragraph 72 - 76 of the Cabinet of Ministers Regulations NR 357 "Enforcement Regulations for the Law "On Personal Income Tax'' of 18.10.2000, effective from 21.10.2000, 'Latvijas Vēstnesis', 20.10.2000, NR 370/372)".

Personal income tax amounts on income from business activities that are not an object of taxation with corporate income taxshall be calculated and paid into the budget by taxpayers (paragraph 3 of the first part of Article 4 of the law "On Personal Income Tax").

Before February 1st of each year of taxation or one month after commencement of business activities taxpayers shall submit a calculation to the local office of the State Revenue Service according to their place of residence on the amount of tax advance payments made during the period of taxation based on the size of income for the preceding year or by forecasting the estimated amount of tax for the year.

Taxpayers who have commenced business activities in the taxation year may opt for execution advance tax payments for the taxation year (first and seventh paragraph of Article 18 of the law "On Personal Income Tax").

Taxpayers (business entities) shall independently make payments to the state budget of the estimated tax advance amounts for the year of taxation in the following terms: no later than on March 15th, June 15th, August 15th, November 15th - by transferring each time one fourth of the amount of tax advance payment if not otherwise stated by the local office of the State Revenue Service (third paragraph of Article 18 of the law "On Personal Income Tax").

The tax return with the enclosed documents that evidence the transfer of tax amounts to the state budget shall be submitted to the local office of the State Revenue Service according to the place of residence of tax payers from March 1st  till June 1st of the year following the taxation year (fifth paragraph of Article 19 of the law "On Personal Income Tax").


Last modified: 22.04.2014

© Valsts ieņēmumu dienests, 2005
Smilšu iela 1, Rīga, LV-1978
Tālrunis 67 028703, fakss 67 028704