From 1 January 2024 the minimum monthly wage in Latvia will increase from 620 to 700 euros. Additionally, many old-age and disability pensioners receive additional money for the duration of their insurance period.
Workforce-related changes
If the employee attends school, but the employer pays tuition for him, since the studies are related to the acquisition of skills needed by the employer, the employer is not required to pay employment taxes from taxes schools. Once upon a time it was mandatory.
Furthermore, those who work remotely, like those who work in a home office, receive a monthly allowance of 40 euros to cover home office costs, such as paying internet and electricity bills.
Important for businesses
Companies must pay 20% VAT on profits when they distribute profits, for example as dividends.
Latvia has also introduced the so-called bank tax. Lenders, especially banks, have to pay an additional 20% tax on new year’s profits.
Excise duties
From March 1, excise duty rates on alcoholic beverages and tobacco products, among others, will increase. Therefore, 0.67 euros will be added to the price of a liter of strong alcohol, while the price of a liter of beer will increase by 0.05 euros. A liter of wine will cost 0.13 euros more.
The price of a pack of cigarettes (20 cigarettes) will increase by 0.49 euros. Tobacco will also increase in price: 40 g will cost 0.67 euros more. The price of 10 ml of e-liquid will increase by 0.48 euros.
VAT
From next year, a tax rate of 12% will be applied to fruit, vegetables and berries instead of the current VAT of 5%.
To mitigate the impact of inflation on small businesses, the threshold for their registration as a taxable person will be increased from €40,000 to €50,000 per year. This means that if the total cost of products and services subject to VAT has not exceeded €50,000 in the previous 12 months, the small business is not required to register as a VAT payer.
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2023-12-29 13:30:00
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