Latvia up­holds pro­posal for dif­fer­en­ti­ated per­sonal in­come tax

The Baltic Times - - BALTIC NEWS - LETA/TBT Staff

The Lat­vian gov­ern­ment to­day up­held the leg­isla­tive pro­posal for a dif­fer­en­ti­ated per­sonal in­come tax, start­ing with 2018. Un­der the draft amend­ments to the Law on Per­sonal In­come Tax ap­proved by the Cab­i­net for the fi­nal read­ing in the par­lia­ment, the ex­ist­ing 23 per­cent tax will be re­placed by dif­fer­en­ti­ated tax rates at 20 per cent, 23 per cent and 31.4 per cent.

A 20 per­cent rate will ap­ply to an­nual in­comes up to EUR 20,000, a 23 per cent rate will ap­ply to an­nual in­comes from EUR 20,001 to EUR 55,000, and a 31.4 per cent rate to an­nual in­comes of over EUR 55,000.

There will be a sin­gle 20 per cent tax on cap­i­tal in­come, in­clud­ing cap­i­tal gains, that would re­place the ex­ist­ing 10 per cent tax on cap­i­tal in­come and the 15 per cent tax on cap­i­tal gains.

Per­sonal in­come tax will be levied also on cash lot­tery prizes, with the ex­cep­tion of the Cen­te­nary Lot­tery, and gam­bling win­nings worth more than EUR 3,000, but the lot­tery prizes in the form of goods and ser­vices will be ex­empt from the tax.

The min­i­mum non-tax­able in­come for pen­sion­ers will be raised to EUR 250 a month in 2018, to EUR 270 in 2019 and to EUR 300 in 2020 and be­yond.

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