The tax treaty between Latvia and Liechtenstein will come into force on 23 May 2026, introducing zero withholding rates for inter-company dividends, interest, and royalties, with the provisions taking effect from 1 January 2027.
Latvia and Liechtenstein will implement their income and capital tax treaty on 23 May 2026. The agreement, which was signed on 2 October 2025, will become applicable starting 1 January 2027.
The treaty encompasses several tax categories in both nations. For Latvia, it covers enterprise income tax, personal income tax, and immovable property tax. Liechtenstein’s included taxes are personal income tax, corporate income tax, real estate capital gains tax, and wealth tax.
The agreement establishes favourable withholding tax rates for cross-border transactions between companies. Dividends paid to corporate beneficial owners will face zero withholding tax, while other recipients will be subject to a 10% rate. Interest payments between companies of the two states will be exempt from withholding tax, with a 10% rate applying to other cases. Royalties paid between companies will not be taxed at source, though a 5% withholding rate applies to other situations.
Earlier, Latvia enacted a legislation on 26 February 2026 to ratify its income and capital tax agreement with Liechtenstein.
