Dividends
In Latvian: Dividendes
Dividends (dividendes) are the share of company profit paid to members or shareholders. In Latvia the tax is normally paid by the company: 20% corporate income tax (UIN) on a base found by dividing the dividend by 0.8, and the individual then pays no personal income tax on it.
Because UIN has been paid at company level, dividends received by an individual member are exempt from IIN. They still count towards total income for the additional 3% IIN on income above EUR 200,000 a year.
Since 2026 a company whose members are all natural persons may choose an alternative regime: 15% UIN on a base found by dividing the dividend by 0.85, and 6% IIN for the member. Dividends paid under this regime do not get the IIN exemption.
Example
The sole member of SIA "Ozols" takes EUR 4,000 in dividends. Under the general regime the company pays UIN of 4,000 / 0.8 × 20% = EUR 1,000 and the member pays no IIN. Under the alternative regime UIN would be 4,000 / 0.85 × 15% = EUR 705.88, and the member would pay 6% IIN, EUR 240.
Legal basis
- Enterprise Income Tax Law, Section 4.2 likumi.lv
- Law on Personal Income Tax, Section 9 likumi.lv
- Law on Personal Income Tax, Section 15 likumi.lv
This explanation is for information and does not replace tax or legal advice. The law in its current consolidated text prevails.