On January 1st, 2025, significant amendments to Latvia's tax legislation came into effect, impacting both individuals and legal entities.

Changes in Taxes for Individuals

A unified non-taxable minimum has been introduced: €510 per month in 2025, with planned increases to €550 in 2026 and €570 in 2027. For pensioners, the minimum has been raised to €1,000 per month.

Personal income tax rates:

The capital gains and investment income tax rate has been raised from 20% to 25.5%.

Employers are now eligible for additional non-taxable compensation options:

Changes in Taxes for Legal Entities

From 2025, the micro-enterprise tax regime has been simplified — re-registration is allowed during the tax year under certain conditions.

Excise tax adjustments:

Vehicle operation tax rates will increase by 10% starting in 2025, and company car tax rates will rise by 10% from 2027. The lottery tax rate has increased from 10% to 15%, and gambling tax rates will rise starting in 2027.

These reforms aim to reduce the tax burden for low- and middle-income individuals, improve system transparency, and support economic competitiveness.