Latvia Corporate Income Tax

Corporate income tax rates and base

Latvia operates a distribution-based (Estonian-style) corporate income tax: profits are taxed only when distributed or deemed distributed, so retained and reinvested earnings carry a 0% rate.

• CIT rate on distributed profits — 20% applied to the gross-up base (taxable base ÷ 0.8), i.e. 20/80 of the net distribution = an effective 25% rate % (Corporate Income Tax Law (Uzņēmumu ienākuma nodokļa likums) — https://taxsummaries.pwc.com/latvia/corporate/taxes-on-corporate-income)
• CIT rate on retained / reinvested profits — 0% (tax is deferred until profit is distributed) % (Corporate Income Tax Law (Uzņēmumu ienākuma nodokļa likums) — https://taxsummaries.pwc.com/latvia/corporate/taxes-on-corporate-income)
• Tax base — Distributed profits, deemed distributions, non-business expenses, and certain transfer-pricing/excess-debt adjustments — not annual accounting profit as such (Corporate Income Tax Law (Uzņēmumu ienākuma nodokļa likums) — https://taxsummaries.pwc.com/latvia/corporate/income-determination)
• CIT calculation — CIT = (net distribution ÷ 0.8) × 20% (Corporate Income Tax Law (Uzņēmumu ienākuma nodokļa likums) — https://taxsummaries.pwc.com/latvia/corporate/taxes-on-corporate-income)
• Alternative regime for individual-owned companies (from 2026) — Distributed profits taxed at 15% CIT (15/85 of net) plus 6% PIT withheld from the individual (approx — confirm; takes effect 1 January 2026) % (approx — confirm; takes effect 1 January 2026) (Corporate Income Tax Law (Uzņēmumu ienākuma nodokļa likums) — https://taxsummaries.pwc.com/latvia/corporate/taxes-on-corporate-income)
• Withholding tax on dividends to non-residents — 0% (general); 20% if paid to a company in a listed low-tax/non-cooperative jurisdiction % (Corporate Income Tax Law (Uzņēmumu ienākuma nodokļa likums) — https://taxsummaries.pwc.com/latvia/corporate/withholding-taxes)
• Withholding tax on interest to non-residents — 0% (general); 20% if paid to a company in a listed low-tax/non-cooperative jurisdiction % (Corporate Income Tax Law (Uzņēmumu ienākuma nodokļa likums) — https://taxsummaries.pwc.com/latvia/corporate/withholding-taxes)
• Withholding tax on royalties to non-residents — 0% (general); 20% if paid to a company in a listed low-tax/non-cooperative jurisdiction % (Corporate Income Tax Law (Uzņēmumu ienākuma nodokļa likums) — https://taxsummaries.pwc.com/latvia/corporate/withholding-taxes)
• Withholding tax on management and consulting fees to non-residents — 20% (may be reduced to 0% under a tax treaty with no PE and a valid residence certificate) % (Corporate Income Tax Law (Uzņēmumu ienākuma nodokļa likums) — https://taxsummaries.pwc.com/latvia/corporate/withholding-taxes)
• Withholding tax on real-estate proceeds to non-residents — 3% on proceeds from disposal of Latvian real estate; 5% on rental income from Latvian real property % (Corporate Income Tax Law (Uzņēmumu ienākuma nodokļa likums) — https://taxsummaries.pwc.com/latvia/corporate/withholding-taxes)
• CIT return and payment deadlines — Return by the 20th of the month following the month in which a tax base arises; tax paid by the 23rd (Corporate Income Tax Law (Uzņēmumu ienākuma nodokļa likums) — https://www.vid.gov.lv/en/corporate-income-tax)