Latvia

{"ftc_utility":"high","fbar_trigger_notes":"Latvian banks (including Swedbank, SEB, Citadele) are widely used by expats. A local bank account is effectively required for day-to-day living and payroll. Any account exceeding $10,000 aggregate with all foreign accounts triggers FBAR filing (FinCEN 114). FATCA reporting agreements are in place between Latvia and the US - Latvian banks report US person account data to VID which shares with IRS.","ftc_utility_reason":"Latvia imposes income tax at 20-31% on worldwide income of tax residents. These rates exceed or match US rates on equivalent income, making the foreign tax credit (FTC) highly effective at eliminating US double taxation. For most income levels the Latvian tax paid will fully offset the US tax liability on the same income, making FTC generally preferable to FEIE for higher earners.","presence_day_count_notes":"Latvia is a Schengen Area member. Days spent in Latvia count toward the 330-day physical presence test as normal. There are no visa restrictions for US citizens for short stays (90 days in any 180-day period under Schengen rules), but establishing long-term residence requires a residence permit. US citizens can stay visa-free for up to 90 days; longer stays require registering as a resident, which supports the bona fide residence test. The 330-day count across any consecutive 12-month period is achievable once a residence permit is obtained.","typical_qualifying_method":"either","housing_exclusion_available":true,"physical_presence_test_applies":true,"estimated_housing_exclusion_usd":16800,"local_tax_rate_on_earned_income":0.2,"bona_fide_residence_test_applies":true}

{"pension_income":{"notes":"Foreign pension income received by Latvian tax residents is generally subject to Latvian PIT at progressive rates. Treaty protections may apply depending on source country. Latvian state pension income is taxable but recipients typically benefit from a non-taxable minimum (the general non-taxable minimum varies by income level, set annually).","tax_rate":0.2,"locally_taxed":true},"social_security":{"notes":"Under the US-Latvia tax treaty, US Social Security benefits paid to a Latvian resident are taxable only in the United States. Latvia does not impose its own PIT on US Social Security income received by residents.","locally_taxed":false,"treaty_protection":true},"roth_distributions":{"notes":"Latvia does not have a specific provision recognizing the tax-exempt character of Roth IRA distributions. Distributions may be treated as pension income subject to Latvian PIT. The treaty does not explicitly exempt Roth distributions. US expats should seek specific advice on Roth treatment under Latvian domestic law.","locally_taxed":true},"us_401k_ira_distributions":{"notes":"The US-Latvia income tax treaty (in force since 1996) contains pension provisions. US-source pension and retirement distributions are generally taxable only in the country of residence. A Latvian tax resident receiving 401k or IRA distributions would generally pay Latvian PIT at progressive rates (20-31% depending on total income). Treaty Article 18 covers pensions. US taxpayers can claim a foreign tax credit for Latvian tax paid against US tax liability on the same income.","tax_rate":0.2,"locally_taxed":true,"treaty_protection":true}}

{"rate":0.2,"notes":"Capital gains for individuals are generally taxed at 20%. Gains from the sale of real estate held more than 60 months (with primary residence conditions) may qualify for exemption.","details":{"tax_type":"Capital Gains Tax","country_name":"Latvia","country_iso_code":"LVA","source_references":["PwC Worldwide Tax Summaries - Latvia","Latvia State Revenue Service (VID)"],"last_verified_date":"2026-06-03","general_description":"Latvia taxes individual capital gains at a flat 20% rate. Gains on publicly traded shares held more than 12 months are exempt. Gains from the sale of a primary residence owned and occupied for at least 12 months before sale are exempt if the proceeds are reinvested in new housing within 12 months, or if the property was held for at least 60 months and the taxpayer was registered as a resident there for at least 12 months. Corporate capital gains are folded into the distributed profits tax system.","corporate_capital_gains":{"rate":0.2,"tax_treatment":"Under Latvia's corporate income tax system (effective 2018), corporate profits including capital gains are only taxed upon distribution. Retained gains are not taxed. Distributed profits are subject to a 20% CIT (grossed up, effective rate on gross profit is 20/80). Gains from qualifying EU/EEA subsidiary shareholdings may be exempt."},"individual_capital_gains":{"rate":0.2,"tax_treatment":"Flat 20% rate on net gains. Gains on listed shares held over 12 months are exempt. Primary residence gains may be exempt under conditions. Real estate gains may be reduced by documented acquisition and improvement costs."}}}

{"notes":"Dividends paid by Latvian companies to individuals are subject to a 20% withholding tax. Dividends paid from profits that have already been subject to Latvian corporate income tax (distributed profits tax) are exempt from further personal income tax at the shareholder level. Dividends received from EU/EEA companies or treaty countries may be exempt or reduced.","rates":[{"rate":0.2,"type":"withholding","notes":"Standard rate on dividends paid to resident and non-resident individuals where underlying profits have not yet borne Latvian CIT."},{"rate":0,"type":"exempt","notes":"Dividends paid out of profits already subject to Latvia's distributed profits CIT are exempt from additional PIT at the individual level."}]}