On 9 December 2023, Latvia’s Ministry of Finance of Latvia announced that the parliament approved the 2024 state budget and 19 accompanying laws. 

The key amendments include:

Amendments to the personal income tax

The Personal Income Tax Act amendments provide several measures to promote sustainable human capital development in Latvia. The amendments include: 

  • the exemption of an employee’s income from payroll tax if the employer pays the employee’s tuition fees for higher education and studies related to the acquisition of skills that are necessary for the employer;  
  • an increase in the exemption threshold for employer-paid health insurance premiums to EUR 750 per year;  
  • an increase in employer reimbursements for employee expenses related to remote working to EUR 40 per month.

Amendments to the micro-enterprise tax law

  • a proposed flat tax rate of 25% for micro-enterprises instead of the current two rates of 25% and 40%. 

Amendments to the value-added tax (VAT) law

  • the exemption of VAT from certain services closely linked to sport; 
  • raising the VAT registration threshold to EUR 50,000 from EUR 40,000; 
  • a reduced VAT rate of 12% for fresh fruits and vegetables.

Amendments to the enterprise income tax law

  • credit institutions and consumer credit providers will pay an annual enterprise income tax surcharge of 20% calculated on the basis of their financial data of the pre-taxation year.

The measures will go into effect on 1 January 2024.