Personal Income Tax

 Publicēts: 19.03.2018. 11.58


The voluntary submission of an annual income declaration for 2017: repayment of tax overpayment, eligible expenditure for education and therapeutic services:

  • In which cases is it in the taxpayer’s interests to submit the annual income declaration?
    • There are cases where it is not mandatory for the taxpayer to submit the annual income declaration, but it is in his or her interests to submit the declaration in order to receive the overpaid tax.

      The taxpayer has the right to submit the declaration and receive a tax overpayment from the State budget in the following cases:

      1. If the following is not applied to you during the taxation year:

      • the entire annual non-taxable minimum determined in Section 12 of the Law On Personal Income Tax (in 2017, the minimal non-taxable minimum — EUR 720, and the maximal non-taxable minimum — EUR 1,380).


      The annual differentiated non-taxable minimum shall be calculated according to a special formula once a year, when submitting the annual income declaration. Upon submitting the annual income declaration in the Electronic Declaration System of the State Revenue Service, the differentiated non-taxable minimum will be calculated for the taxpayer automatically.

      If the total amount of the taxpayer’s annual taxable income in 2017 is less or equal to EUR 4,800 upon submitting the annual income declaration, the maximum amount of the annual non-taxable minimum, i.e. EUR 1,380, shall be applied.

      If the total amount of the taxpayer’s annual taxable income in 2017 is within the range of EUR 4,800 to EUR 13,200 with income increasing, the applicable annual differentiated non-taxable minimum shall be gradually reduced.

      If the total amount of the taxpayer’s annual taxable income in 2017 exceeds EUR 13,200, only the minimum amount of the monthly non-taxable minimum, i.e., EUR 60 a month or EUR 720 a year, shall be applied.

      all reliefs determined in Section 13 of the Law On Personal Income Tax for dependents (in 2017 — EUR 2,100 per dependent) or additional reliefs for persons, for whom disability is determined (EUR 1,848 a year for persons with disability of group I and II, and EUR 1,440 a year for persons with disability of group III) and politically repressed persons, or members of the national resistance movement (EUR 1,848 a year).

      2. If the following was determined for you in the taxation year as stipulated by Section 10 of the Law On Personal Income Tax:

      • eligible expenditure for education, including for children’s special education (clubs, sports school, music school, etc.), and therapeutic services and health insurance payments to insurance companies established and operated in accordance with the Law On Insurance Companies and Supervision Thereof;
      • donations and gifts provided;
      • donations and gifts to Latvian political parties;
      • payments into private pension funds;
      • insurance premium payments pursuant to a life insurance contract (with savings of funds).


      (!) It should be noted that, when declaring the eligible expenditure for education and therapeutic services and health insurance payments and completing the 2017 income declaration, the applicable rate of eligible expenditure is EUR 215.


      Example 1

      The natural person was not employed from January to June, but started employment as from 1 July. At his or her place of employment a non-taxable minimum for six months is applied (EUR 360 for the period from July to December). Upon submitting an annual income declaration, the differentiated annual non-taxable minimum (EUR 720 – EUR 1,380) is applied depending on the total amount of income gained during the taxation year. The taxpayer can receive back tax overpayment.

      If the total amount of the taxpayer’s annual taxable income in 2017 is less or equal to EUR 4,800 upon submitting the annual income declaration, the maximum amount of the annual non-taxable minimum, i.e. EUR 1,380, shall be applied.


      Example 2

      Within the year, the natural person had a child in his or her dependence, but no entry has been made in the payroll tax booklet regarding granting a relief; hence, no relief for a dependent person was applied at the place of employment. Submission of the annual income declaration and application of a relief for a dependent person (EUR 2,100) results in a tax overpayment in the amount of 23% of EUR 2,100 = EUR 483,00. This overpaid amount can be recovered from the State budget.


      Example 3

      Within the year, the natural person acquired a health insurance policy for EUR 170 and paid EUR 40 for medical services and EUR 110 for dental services. By submitting the annual income declaration reflecting the eligible expenditure justified by supporting documents, 23% of (EUR (170 + 40) + EUR 110) = EUR 73.60 can be recovered from the State budget.


      Example 4

      The natural person whose annual non-taxable income exceeds EUR 3,600 has made payments into a private pension fund amounting to EUR 30 per month during the year. By submitting the annual income declaration which reflects the payments made into the private pension fund, 23% of EUR 30 x 12 = EUR 82.80 can be recovered from the budget.

  • Where should the declaration be submitted?
    • The personal annual income declaration with documents enclosed thereto, which certify eligible expenditure, is submitted using the SRS EDS, i.e., in electronic form (Handbook on submission of a declaration via EDS[1]). The documents (copies) to be enclosed to the annual income declaration are to be sent electronically by adding them in the form of files as photographs (by previously photographing the supporting documents and downloading them to a computer), or as scanned documents, or submitted personally at a SRS customer service centre, or sent by post.

      In order to ensure a more convenient and simple electronic submission of the annual income declaration by using the EDS, the SRS has developed an electronic form of the annual income declaration form where the taxpayer’s information at the SRS disposal is generated automatically. The electronic annual income declaration form in the EDS is a substantial time-saver for taxpayers, since it will generate automatically the data regarding the taxpayer’s income, non-taxable income, information from credit institutions regarding payments to pension funds, information from insurance companies regarding payments for life insurance services, as well as eligible expenditure for education and therapeutic services carried over from the previous years.

      In order to help the taxpayer understand which columns and annexes to the annual income declaration must be completed, the electronic annual income declaration form has an integrated wizard or help: prior to the completion of the declaration the system asks the user to answer several questions, and, on the basis of the answers provided, the user is offered to complete only those annexes and columns of the annual income declaration which relate to the respective user.


      [1] Information available in Latvian

  • Annual income declaration form
    • The annual income declaration form consists of Declaration D and annexes thereto:

      • Annex D1 “Income in the Republic of Latvia during the taxation year”;
      • Annex D11 “Income gained during the taxation year, for which the annual differentiated non-taxable minimum and reliefs are not applied”;
      • Annex D2 “Income of a natural person (resident) abroad”;
      • Annex D21 “Income of a natural person (seafarer) who is employed (is in employment relations) on an international transportation ship”;
      • Annex D3 “Income from economic activity”;
      • Annex D31 “Income from economic activity if the taxpayer keeps accounts according to the double entry system”;
      • Annex D4 “Eligible expenditure for education and therapeutic services”;


      If the taxpayer has been in paid employment and he or she has had eligible expenditure for education or therapeutic services, rows 06 and/or 07 of Declaration D, as well as Annex D4 must be completed.

      The payer completes Declaration D and annexes thereto, which apply to the payer. It should be noted that a separate annex form to Declaration D4 must be completed for the taxpayer and each of his or her family members.

  • What documents must be submitted and where in order to receive the overpaid personal income tax?
    • In order to receive refund for eligible expenditure, the personal annual income declaration with documents enclosed thereto, which certify eligible expenditure, is submitted using the SRS EDS, i.e., in electronic form (see section Private persons/Electronic Declaration System[1] on the SRS website). The documents (copies) to be enclosed to the annual income declaration are to be sent electronically by adding them in the form of files as photographs (by previously photographing the supporting documents and downloading them to a computer), or as scanned documents, or submitted personally at a SRS customer service centre, or sent by post.

      The overpaid personal income tax (eligible expenditure) may be justified by the following supporting documents:

      • a cashier’s check, if the payment was made in cash, using a payment card or other proof of payment, and if the cashier’s check specifies, in addition to the mandatory details to be included, the name, surname and personal identity number of the natural person or his or her family member;
      • a cashier’s check and a receipt prepared in addition to the cashier’s check, if the name, surname and personal identity number of the natural person or his or her family member is not specified in the cashier’s check. The receipt prepared in addition to the cashier’s check must specify all the mandatory details to be included in a supporting document, as well as the number and date of the cashier’s check and the name, surname and personal identity number of the natural person or his or her family member;
      • a numbered receipt which has been registered in the SRS, if the service payment was made in cash and the service provider can prove the payment received with a numbered receipt registered in the SRS (for example, an insurance intermediary who has received a payment for services provided at a permanent place of activity [structural unit]);
      • a cash income order, if the service payment was made in cash at an institution which is able to prove the payment received for the service by a cash income order (for example, insurance companies for the services provided);
      • an approved payment order or account statement, if the service payment was made by a bank transfer (for example, by using Internet banking services) or by paying a cash amount to the service provider’s (for example, education or medical treatment institution’s) account opened with a credit institution. In this case, the payment order or account statement must specify the name, surname and personal identity number of the natural person or his or her family member.


      Upon submitting the annual income declaration, a natural person must specify his/her current account with a credit institution, to which the SRS will transfer overpayment within three months.

      The payer who wants to receive a tax repayment should note that, if necessary for the purposes of establishing the justification of the tax repayment, officers of the SRS are entitled to request other supporting documents (contracts concluded, invoices received, statements, etc.) in addition to those already submitted.

      When declaring payments made into a private pension fund or insurance premium payments made, it is not necessary to submit supporting documents for the above-mentioned payments or to submit the statement regarding the life insurance contract (with savings of funds) concluded by the natural person and insurance payments made pursuant thereto, if the private pension fund or the insurance company has concluded a contract with the SRS for sending information in electronic form and has sent the necessary information.

      In turn, if insurance premium payments (with savings of funds) are made in an insurance company registered in another European Union Member State or a country of the European Economic Area, or a member country of the Organisation of Economic Co-operation and Development, in order to certify eligible expenditure made during the taxation year, upon submitting the annual income declaration, both the copies of source documents and a statement, which certifies that the life insurance contract (with savings of funds) signed by a natural person (purchased policy) complies with requirements set forth in Section 10 Paragraph one Clause 6 of the Law On Personal Income Tax and which specifies the validity period of the insurance contract, an insured person (given name, surname, personal identity number) and the amount of insurance premiums paid during the taxation year and the distribution of the insurance premium amount by years, are enclosed thereto.

      The annual income declaration is prepared on the basis of:

      • statement on amounts paid to a natural person (issued by an employer or payer of income);
      • statement on sickness benefits in accordance with Sick-Leave Certificate B (to be issued by the State Social Insurance Agency);
      • statement on pension (issued by the State Social Insurance Agency).


      A repayment of personal income tax for eligible expenditure may be received if the resident has been employed and has paid the personal income tax.

      The taxpayer has the right to adjust the already submitted annual income declaration, for which repayment has already been received, within three years, if, for example, additional receipts were found.

      If the annual income declaration, in which there was eligible expenditure, must be adjusted, upon submitting an annual income declaration in the EDS, it shall be completed anew, including also receipts which were found later, and the adjusted annual income declaration shall be submitted.

      As an annual norm is set for eligible expenditure, the amounts of expenses exceeding this norm are transferred to the upcoming year/s. If the taxpayer submits a declaration in the EDS, the EDS calculates automatically eligible expenditure to be transferred to future taxation periods in the box of eligible expenditure of Annex D4.


      [1] Information available in Latvian