Royalty tax calculator
In 2026, when an author has not registered a business, the payer withholds 25% of a royalty, of which 80% is social insurance (VSAOI) and 20% income tax (IIN), and that settles the tax (Personal Income Tax Law, transitional provisions 164 and 171; the regime is available until 31 December 2027). A registered author pays 31.07% VSAOI on at least €780 a month and 10% on the rest, plus 25.5% IIN on income after a 25% or 50% expense norm, while a collective management organisation withholds 25.5% IIN with no VSAOI.
Calculator
| Regime | VSAOI | IIN | Total tax | Kept |
|---|---|---|---|---|
| Not registered (25%) | 200.00 € | 50.00 € | 250.00 € | 750.00 € |
| Registered business, general regime | 75.00 € | 172.13 € | 247.13 € | 752.87 € |
| Microenterprise tax | 200.00 € | 50.00 € | 250.00 € | 750.00 € |
| Collective management organisation | 0.00 € | 191.25 € | 191.25 € | 808.75 € |
You keep the most under "Collective management organisation": 808.75 €.
- Not registered (25%) 1,000 €
- Registered business, general regime 1,000 €
- Microenterprise tax 1,000 €
- Collective management organisation 1,000 €
What the calculator assumes
- The amount is a royalty received in one month, with no other business income that month.
- In the general regime the VSAOI object is the €780 minimum wage and IIN is 25.5% with no non-taxable minimum, since that is usually used at a main job. VID’s comparison tables work the same way.
- Annual income stays under €105,300. Above it IIN is 33%, and the general regime may owe more in the annual return.
- The 25% or 50% norm depends on the kind of work. If actual expenses are higher, a registered author can use them instead.
Example: €1,000 for a translation
A translator receives a €1,000 royalty. Translations take the 25% expense norm. This is what she keeps under each regime:
| Regime | VSAOI | IIN | Total tax | Kept |
|---|---|---|---|---|
| No registered business (25%) | €200.00 | €50.00 | €250.00 | €750.00 |
| Registered business, general regime | €75.00 | €172.13 | €247.13 | €752.87 |
| Microenterprise tax payer | €200.00 | €50.00 | €250.00 | €750.00 |
| Paid by a collective management organisation | €0.00 | €191.25 | €191.25 | €808.75 |
In the general regime her income after the norm is €750, below the minimum wage, so VSAOI is only 10%. A musician paid €1,600 with the 50% norm keeps €1,213.96 in the general regime and €1,200.00 without registering.
Four ways a royalty is taxed
| Regime | Who pays | Expense norm | Tax |
|---|---|---|---|
| No registered business (25%) | Withheld by the payer | None | 25% of the whole amount: 20 pp VSAOI and 5 pp IIN |
| Registered business, general regime | The author | 25% or 50%, or actual expenses | 31.07% VSAOI on at least €780 and 10% on the rest; IIN 25.5% or 33% in the annual return |
| Microenterprise tax payer | The author | None | 25% of turnover |
| Paid by a collective management organisation | Withheld by the organisation | 25% or 50% | IIN 25.5% or 33%, no VSAOI |
The author chooses the unregistered regime, and the payer withholds 25% from every payment. Such royalties are left out of the annual income return and get no expense norm, non-taxable minimum or relief (Personal Income Tax Law, transitional provision 170).
The expense norm: 25% or 50%
A registered author with no other business income, and a collective management organisation, may deduct a notional expense from a royalty without receipts (Personal Income Tax Law, section 10(1)(4) and 11(3.5); Cabinet Regulation No. 899, paragraph 57).
| Norm | Works |
|---|---|
| 50% | Dramatic and choreographic works, music and its performance, audiovisual works, painting, graphic art, sculpture, design, photography, stage design, architectural sketches and projects |
| 25% | Literary, scientific, educational and journalistic works, scripts, translations, abstracts, papers, compiling collections |
VSAOI for a registered author
- In a month when income after the norm is €780 or more: 31.07% on a chosen object of at least €780, plus 10% on the rest.
- In a month when income is under €780: 10% for pension insurance on all of it.
- A royalty recipient may pay the 10% part once a year, by 23 January of the next year.
- An author of state pension age, or with group I or II disability, pays no VSAOI on royalties (Law on State Social Insurance, section 6(13)).
- Since 1 January 2026 the minimum contributions (€780 × 3 a quarter) no longer apply to the self-employed, royalty recipients included.
When the author has to file
If an unregistered author is paid from abroad, or by a private person who is not in business, nothing is withheld. The author then files a royalty recipient return by 28 February of the next year and pays the 25% by 23 June (Personal Income Tax Law, transitional provisions 166 and 168).
Frequently asked questions
- How much tax is withheld from a royalty in Latvia in 2026?
- If the author has no registered business, the payer withholds 25% of the whole amount, 80% of it as VSAOI and 20% as IIN, so €1,000 becomes €750. A collective management organisation withholds 25.5% IIN from the amount after a 25% or 50% expense norm.
- Do I have to register a business to receive royalties?
- No. Until 31 December 2027 an author may choose not to register, and the payer then withholds 25% (Personal Income Tax Law, transitional provision 163). Registering can pay off, for example with the 50% norm or higher actual expenses.
- Which is cheaper: the 25% regime or a registered business?
- It depends on the amount and the norm. In VID’s own figures, with the 25% norm the general regime is slightly cheaper when monthly income is under the minimum wage, but at €1,600 it already costs more. With the 50% norm the general regime is often cheaper. Enter your amount and the calculator shows every regime side by side.
- Does the 25% royalty tax count towards my pension?
- Partly, yes. Four fifths of the 25% withheld (20% of the royalty) is VSAOI, registered as your social insurance contributions at the self-employed rate (Law on State Social Insurance, transitional provision 95).
- Does the non-taxable minimum apply to royalties?
- Not in the unregistered regime: the 25% is final, with no relief. A registered author in the general regime gets the non-taxable minimum and reliefs in the annual return, unless they are already used against a salary.
- Does the 3% surcharge apply to royalties?
- Royalties taxed at 25% without registration are left out of the 3% surcharge calculation (Personal Income Tax Law, transitional provision 200). A registered author’s income counts towards the €200,000 limit.
Sources
- Personal Income Tax Law, sections 10 and 11, transitional provisions 163 to 171 (likumi.lv, Latvian)
- Law on State Social Insurance, sections 6 and 14.1 (likumi.lv, Latvian)
- VID guidance "Nodokļi no autoratlīdzības 2026", updated 28.05.2026 (vid.gov.lv, Latvian)
- Cabinet Regulation No. 786 on the split of the VSAOI rate (likumi.lv)
- Cabinet Regulation No. 656 on the minimum monthly wage (likumi.lv)
Prepare a royalty statement
Fakts works out the tax to withhold, numbers the statement and turns it into an acceptance act. Free.