Latvia has enacted legislation ratifying its first-ever income and capital tax treaty with Liechtenstein, eliminating withholding taxes on dividends, interest, and royalties between corporate entities and capping rates for other scenarios.
Latvia enacted legislation on 26 February 2026 to ratify its first income and capital tax agreement with Liechtenstein.
The two countries signed this treaty on 2 October 2025. The agreement applies to Latvia’s enterprise income tax, personal income tax, and immovable property tax, as well as Liechtenstein’s personal and corporate income taxes, real estate capital gains tax, and wealth tax.
The treaty removes withholding taxes entirely on dividends, interest, and royalties between corporate entities in both countries. For other scenarios, withholding tax caps are set at 10% for dividends and interest, while royalties face a reduced 5% maximum rate.
The agreement becomes effective 15 days following the exchange of ratification documents between both nations.
Tax provisions will take effect from 1 January of the subsequent year after the treaty’s activation.
Earlier, Liechtenstein’s parliament approved the ratification of its income and capital tax treaty with Latvia on 7 November 2025.
