Latvia
| Category | Rank | Score |
|---|---|---|
| Overall Rank | 2 | 85.08 |
| Corporate Taxes | 2 | 99.55 |
| Individual Taxes | 5 | 86.13 |
| Consumption Taxes | 27 | 60.59 |
| Property Taxes | 5 | 78.04 |
| Crossborder Taxes | 9 | 84.92 |
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