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LV 鈥� Lower PIT Rate for OECD Citizens Holding Latvian Digital Nomad Visa

GMS Flash Alert 2023-179 | September 15, 2023

Over the past several months, Latvia has introduced immigration and tax policies to attract certain qualified workers from outside Latvia to come to the country to live and work.

In order to attract a highly-qualified labour force, and promote commercial activity and economic development, on 29 June 2022, amendments to the Immigration Law came into force, that, among other things, introduced a digital nomad visa.1

On 28 June 2023, amendments were adopted into the law "On Personal Income Tax."2聽Now, citizens and residents of OECD member states (hereinafter, 鈥渃itizens of OECD鈥�) who have obtained a digital nomad visa have the right to choose to apply a 15-percent personal income tax (hereinafter, 鈥淧IT鈥�) rate to income earned in Latvia on the basis of being in possession of a Latvia-government-issued digital nomad visa (instead of progressive rates, which go up to 31 percent).

As individuals increasingly choose to work remotely in Latvia from another country, such remote work has acquired a very important role in the current labour market.

罢丑颈蝉听GMS Flash Alert聽summarises recent changes to Latvia鈥檚 country鈥檚 immigration rules and the tax rules intended to attract so-called digital nomads and remote workers.

Why this matters

The new immigration and tax landscape, by virtue of the new Latvian rules described in this newsletter, is an acknowledgement of the growing importance of new work patterns, the competition for talent, and ideas around fostering economic growth 鈥� which are anticipated to continue for the foreseeable future 鈥� and the evolving needs of employers and employees in this 鈥渨ork from anywhere鈥� world.

The digital nomad visa and the lower tax rate that can be applied to visa-holders鈥� income are expected to provide more flexibility and heighten the appeal for foreign nationals who choose to work remotely 鈥� or are thinking about working remotely 鈥� in Latvia.

Companies and remote workers will want to take note of the new rules introduced over the past few months and plan accordingly.

Immigration

Recent changes to Latvia鈥檚 immigration rules3聽facilitate the ability of citizens of OECD to receive a digital nomad visa in Latvia, if they:

  • are employed by an employer registered in an OECD member state or are registered as self-employed in an OECD member state, and
  • perform their work duties remotely, and
  • have been employed or registered in the OECD member state concerned for at least six months prior to the application for a digital nomad visa, and
  • receive a monthly salary which is more than 2.5 times the average wage in Latvia.

PIT

Citizens of OECD who have obtained a Latvia-issued digital nomad visa may be subject to a lower rate of PIT. The rate of 15 percent may be applied within 365 days from the date of becoming a resident for tax purposes in Latvia in accordance with the Law 鈥淥n Taxes and Duties鈥� and the conditions stated in international agreements (i.e., double taxation treaties). The eligible individual must register as a taxpayer with the State Revenue Service (hereinafter, 鈥淪RS鈥�), report the income received, calculate the tax, and pay it to the Latvian treasury.

In addition, it should be noted that such a taxable person, when calculating the PIT, does not have the right to reduce taxable income due to what would ordinarily be considered eligible expenses (for education and medical services, donations, contributions to private pension funds, payment of insurance premiums under an insurance contract (with accumulation of funds, etc.)). There is also no provision for the possibility of applying the annual non-taxable minimum amount and allowances.

The amendments concerning the reduced PIT rate entered into force retrospectively on 1 January 2023, and the rate applies to income earned as from that date.

乐鱼（Leyu）体育官网 Insights

For questions around eligibility assessment and steps to be taken to help ensure compliance, please contact your usual global mobility adviser or a member of the 乐鱼（Leyu）体育官网 Global Mobility Servicesor 乐鱼（Leyu）体育官网 Law Immigration team (see the Contacts section).

For more detailed information on the long-stay visa and remote work visa options in Latvia and other countries, you can see the information prepared by 乐鱼（Leyu）体育官网 (in English) "Digital Nomad and Remote Work visa options",聽聽(PDF 5.5MB).

Also information about obtaining a long-stay visa for remote work is available on the website of the Office of Citizenship and Migration Affairs of the Republic of Latvia.

Contacts

alise-papina
Alise Papina

Senior Manager

乐鱼（Leyu）体育官网 in Latvia

liva-beitaga
Liva Bietaga

Senior Advisor

乐鱼（Leyu）体育官网 in Latvia

Additional Resources

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Footnote

1聽For prior coverage of the introduction of the digital nomad visa, see聽GMS Flash Alert听2022-186, 17 October 2022. For a report on the introduction of a digital nomad visa in Latvia, published by 乐鱼（Leyu）体育官网 in Latvia, see (in Latvian) "Digit膩lo klejot膩ju v墨zas" (30 November 2022) at:聽/lv/lv/home/insights/2022/11/digitalo-klejotaju-vizas.htmlopens in a new tab听.

See on the website of the Office of Citizenship and Migration Affairs "."

2聽For the amendments to the PIT (in Latvian), see "Groz墨jumi likum膩 "Par iedz墨vot膩ju ien膩kuma nodokli'" at:聽听.

3聽See footnote 1.

Disclaimer

The information contained in this newsletter was submitted by the 乐鱼（Leyu）体育官网 International member firm in Latvia.

GMS Flash Alert is a Global Mobility Services publication of the 乐鱼（Leyu）体育官网 LLP Washington National Tax practice. The 乐鱼（Leyu）体育官网 name and logo are trademarks used under license by the independent member firms of the 乐鱼（Leyu）体育官网 global organization. 乐鱼（Leyu）体育官网 International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind 乐鱼（Leyu）体育官网 International or any other member firm vis-脿-vis third parties, nor does 乐鱼（Leyu）体育官网 International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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