Royalty (autoratlīdzība)

A royalty (autoratlīdzība) is payment to an author or performer for creating, publishing, performing or otherwise using a literary, scientific or artistic work. Until 31 December 2027 a Latvian resident with such income may choose not to register as self-employed, and the payer withholds 25% tax.

Where a company, institution, association or registered self-employed person pays the royalty, it withholds 25% of the amount paid and pays it into the unified tax account by the 23rd of the following month. Of that amount 80% goes to state social insurance contributions and 20% to personal income tax.

The non-taxable minimum, reliefs and allowable expenses do not apply to this income, and it is not added to the income taxed at progressive rates. An annual royalty recipient return, due by 28 February of the following year, is only needed if the income came from abroad or no tax was withheld.

The regime does not cover royalties paid by a collective management organisation. An author can also register as self-employed and pay tax under the general rules.