Latvia's Economic Response to Covid-19
New tax changes have been approved by the parliament
Key goals: promotion of the country's social sustainability and economic competitiveness
Main tax changes from 2021*
Increase of the income threshold up to which the differentiated non-taxable minimum is applied
(from EUR 1200 per month to EUR 1800 per month)
The rate of mandatory state social insurance contributions is reduced
(from 35.09% (employer's rate -24.09%, employee's rate - 11%) to 34.09% (employer's rate -23.59%, employee's rate - 10.5%)
A minimum social contribution object for employees whose monthly income does not reach the amount of the
minimum wage is introduced
Reorganization of the micro-enterprise tax regime
(the tax rate is increased to 25% up to turnover of EUR 25'000 and 40% for the excess amount)
Gradually increase of excise duty on tobacco products and changes in vehicle taxes, etc.
Increase of the minimum salary
from EUR 430 to EUR 500 in 2021
* In accordance with the informative report "On the Development Directions of Tax Policy, Promotion of the State's Social
Sustainability and Economic Competitiveness" submitted to the Cabinet of Ministers on September 2, 2020
Source: Ministry of Finance
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