Latvia

Latvia's Rankings
CategoryRankScore
Overall Rank285.08
Corporate Taxes299.55
Individual Taxes586.13
Consumption Taxes2760.59
Property Taxes578.04
Crossborder Taxes984.92

Latvia ranks 2nd overall on the 2021 International Tax Competitiveness Index, the same as in 2020.


Strengths

  • Latvia's corporate income tax system only taxes distributed earnings, allowing companies to reinvest their profits tax-free.
  • Corporations can deduct property taxes when calculating taxable income.
  • Taxes on labor are relatively flat, allowing the government to raise revenue from taxes on workers with very few distortions.

Weaknesses

  • Latvia's network of tax treaties includes 62 countries, a relatively low number.
  • Latvia's thin-capitalization rules are among the stricter ones in the OECD.
  • The threshold at which the VAT applies is significantly higher than the average VAT threshold for OECD countries.

Learn more about the tax system in Latvia

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