Latvia Tax Residency Guide 2026

183-Day Physical Presence Test

• Primary test — 183+ days: An individual is considered a tax resident of Latvia if physically present in Latvia for 183 days or more in the calendar year. Both the day of arrival and departure count as days of presence.
• Calendar year: The 183-day test applies to the calendar year (1 January to 31 December). Presence in the previous or following year is not aggregated.
• Short-term visits: Days spent in Latvia for holidays, business trips, or personal visits all count toward the 183-day total.

Other Residency Criteria

• Primary residence: An individual is also considered a tax resident if they maintain their primary residence (pastāvīgā dzīvesvieta) in Latvia. This is the place where the individual and their family habitually live.
• Centre of economic interests: If the individual's centre of economic interests is in Latvia — where their main professional activities, business operations, and significant investments are located — they may also be deemed resident.
• Declaration of residency: Individuals who declare Latvia as their country of residence for tax purposes and are registered in the Population Register may be treated as residents.

Worldwide Income for Residents

• Worldwide income: Latvia tax residents are subject to tax on their worldwide income — employment income, business profits, investment income, rental income, and capital gains from all sources, both domestic and foreign.
• Foreign tax credit: To avoid double taxation, residents may claim a foreign tax credit for taxes paid abroad on foreign-source income. The credit is limited to the Latvia tax attributable to the foreign income (per-country limitation).
• Treaty relief: Where a DTT applies, the treaty provisions override domestic law and typically allocate taxing rights between Latvia and the source country.

Non-Resident Taxation

• Source-only taxation: Non-residents are taxed only on Latvia-source income. Foreign income is not subject to Latvia tax.
• Latvia-source income includes: employment income for work performed in Latvia, business income attributable to a Latvia permanent establishment, rental income from Latvia real estate, dividends from Latvia companies (20% WHT), and other Latvia-source payments.

No Exit Tax

• No exit tax: Latvia does not impose an exit tax upon departure. Individuals may cease tax residency without an immediate tax charge on unrealised gains or deferred income.
• Cessation of residency: An individual who leaves Latvia ceases to be a tax resident from the date of departure, provided they do not maintain a primary residence or centre of economic interests in Latvia.

DTT Network — 60+ Treaties

• Network size: Latvia has concluded double tax treaties with over 60 countries — an extensive network for a country of its size.
• Key partners: All EU member states, major OECD countries (US, UK, Japan, Canada, Australia, Switzerland, Norway), emerging markets (China, India, UAE, South Africa, Singapore), and many CIS countries (Russia, Belarus, Ukraine, Kazakhstan, Uzbekistan, Azerbaijan).
• Treaty benefits: Reduced WHT rates on dividends (0–15%), interest (0–10%), and royalties (5–15%). Most treaties follow the OECD Model Convention.
• Exchange of information: All treaties include exchange of information clauses aligned with OECD standards.

Tiebreaker Rules

• Tiebreaker hierarchy (OECD Model): In dual residency situations, Latvia's tax treaties resolve conflict using the standard OECD tiebreaker: (a) permanent home available, (b) centre of vital interests (personal and economic relations), (c) habitual abode, (d) nationality, (e) mutual agreement procedure (MAP).
• Application: The tiebreaker determines the single country of residence for treaty purposes. The individual is treated as a resident of only one country for the application of treaty benefits.

Tax Residence Certificate

• Certificate: The tax residence certificate (Nodokļu rezidences sertifikāts) is issued by VID and confirms the tax residency status of an individual or entity for treaty relief purposes.
• Application: The taxpayer must submit an application to VID with supporting documents (identity documents, proof of address, tax returns, etc.).
• Validity: The certificate is typically valid for the calendar year and requires annual renewal for ongoing treaty claims.

FAQs

How many days can I be outside Latvia without losing residency?

There is no specific number of days that automatically breaks residency. If you maintain your primary residence and centre of economic interests in Latvia, you may remain resident even if you are abroad for extended periods. However, if you are absent for more than 183 days and do not maintain a home in Latvia, you may be considered a non-resident.

Can I be a tax resident of Latvia and another country?

Yes, dual residency is possible under domestic laws of both countries. The applicable tax treaty will then determine which country has primary taxing rights through the tiebreaker rules.

Is Latvia a good jurisdiction for cross-border workers?

Yes, Latvia has a significant cross-border worker population from neighbouring EU countries (Estonia, Lithuania) and non-EU countries. Tax treaties with neighbouring countries typically allocate taxing rights based on the 183-day rule and other criteria.

Disclaimer

This guide provides general information about Latvia tax residency for the 2026 tax year. Tax laws and rates may change. Always consult with a qualified Latvian tax advisor (nodokļu konsultants) or VID directly for advice specific to your situation. InvestmentKit does not provide tax advice.