Letonya - emlak vergisi rehberi

Corporate income tax

The Corporate income tax (CIT) is charged at 15% and is payable by Latvian resident companies and non-resident companies trading in Latvia through a permanent establishment.  The tax is reportable on an accounting year basis.

Rental payments to non-resident companies are subject to withholding tax at 5%.

Capital gains

Companies are taxed on capital gains on the sale of real estate or shares in a property company at the standard rate of CIT.

For individuals, capital gains realised on the sale of real estate are exempt if the individual has held the real estate for more than 12 months at the time of disposal. Where the real estate was held for less than 12 months or if it formed part of a business activity, personal income tax is charged at 25% on the gain.

Property tax

Property tax is charged annually at the standard tax rate of 1.5% and is payable by any entity holding Latvian real estate.  This tax is calculated on the cadastral value of any land held on 1 January each year. For buildings and constructions, the tax is charged on the average book value of the asset on 1 January, 1 April, 1 July and 1 October. Property tax is deductible for CIT purposes.

Transfer tax

There is no tax, however a property transfer fee is charged at 2% on the market value of the property, but is limited to 30,000 LVL (42,686 EUR). It is charged irrespective of the residence of the vendor or the purchaser.

VAT

VAT is generally charged at 18%, 5% or 0%.  All legal entities which make taxable supplies in Latvia are subject to VAT.

Property rental payments sourced within Latvia and the supply of new real estate (i.e. buildings sold during construction or within 1 year of completion, renovation, reconstruction or restoration) are subject to VAT at 18%.

The lease of residential apartments and the sale of used real estate are exempt from VAT, without right to deduct input VAT paid on construction or acquisition of the property.


The above is for general information purposes only. It is not intended to be comprehensive or to provide any specific tax advice.