The most important tax changes in 2024

Minimum wage changes

The minimum wage increases from 620 EUR to 700 EUR, while the minimum wage for those employed in construction will increase to 930 EUR (except for workers in the 9th occupational group, where it will remain at 780 EUR until 31.12.2024)

Individual income tax (IIN)
New PIT exemptions:

  •  tuition fees covered by the employer for studies at accredited universities in EU/EEA countries, if related to the acquisition of skills needed by the employer;
  • income from received support for natural persons (outside of its economic activity), if realized through SRS or Altum;
  • exemptions and reliefs for relatives from 01.07.2024. are also applied to persons for whom information about partnership is included in the Register of Natural Persons.

Increased VAT-exempt amounts:

  • health or accident insurance premiums – from 426.86 to 750 EUR;
  •  IIT for remote work compensations – from 30 to 40 EUR for full-time work per month;
  • for assistance for social purposes from the funds of a trade union, public benefit organization, religious organization or its institution – from 1,000 to 3,000 EUR;

Extended deadlines for the application of VAT exemptions:

  • for state support for agriculture or EU support for agriculture and rural development – until the end of 2024;
  • possibility not to apply the criteria of Article 11.7 of the law to the seller of agricultural land – until the end of 2024;
  • ITIN exemption for NVA scholarships and rewards – until 2026. to the end.

Micro-enterprise tax (MUN) and royalties

  • The special royalties regime is also maintained in 2024;
  • MUN and royalties will only have a 25% rate (i.e. the 40% tax rate is abolished);
  • MUN payers will be allowed to apply the non-taxable minimum and reliefs for a dependent person (if they receive income subject to VAT)

Corporate income tax (CIT)

  • advance payments of 20% of the profit made in the pre-tax year have been set for credit institutions and consumer credit service providers;
  • CIT does not have to be applied to the operating expenses of a representative car, if the car has been registered in possession or possession for more than 5 years;
  • CIT does not have to be withheld from payments to private pension funds in the EU, EEA or countries with tax conventions in force

Value Added Tax (VAT)

  • The VAT rate for fruits and vegetables characteristic of Latvia will increase from 5% to 12% in 2024, while it is planned to be 21% from 2025;
  • The VAT registration threshold will increase from EUR 40,000 to EUR 50,000;
  • if the representative car has been registered in ownership or possession for more than 5 years, the 100% input tax deduction limit will no longer be applied to maintenance costs;
  •  the application of VAT to lost debts has been clarified – the marginal value of lost debt will increase from 430 to 1,000 EUR (applies to invoices issued after 01.01.2024), the minimum term for stopping delivery has been reduced from 6 to 3 months, VAT can be adjusted in any (current) VAT declaration.
  •  certain new VAT exemptions – for participation fees set by associations or foundations for participation in sports competitions or fees for sports lessons, implementing an appropriately licensed program, as well as for fees for children’s camps organized in accordance with the requirements of educational regulations;
  •  exchange of information on cross-border payments will be initiated.

Excise tax
A gradual increase in excise tax rates is planned

  • with March 1, 2024/2025/2026 alcoholic beverages – beer, wine, fermented beverages (with alcohol content up to and above 6%), intermediate products (with alcohol content up to 15% and 15-22%), other alcoholic beverages;
  • with March 1, 2024 and January 1, 2025/2026 for oil products in SEZ and free ports and tobacco products – cigarettes, cigars and cigarillos, smoking tobacco (finely cut tobacco, other smoking tobacco), tobacco leaves, heated tobacco, e-liquids and for tobacco substitute products;
  • with March 1, 2024 and January 1, 2026 for soft drinks with a sugar content of 8g/100 ml and energy drinks, regardless of sugar content
  •  with January 1, 2024/2026 for natural gas for use as fuel (in cases where the de minimis support rate specified in the transitional regulations is not applied).

Natural resource tax
New tax objects
– extraction of hydrocarbons;
– textile products;
– single-use products containing plastic (wet wipes, cylinders, filters for tobacco products) and fishing gear, which are not subject to the manufacturer’s extended liability system;
– tires with which vehicles are equipped;
– plastic packaging and the amount of plastic contained in composite packaging, which was not recycled or regenerated during the reporting period;

Gradual increase in DRN rates
– for vehicles (the rate doubles);
– household and hazardous waste disposal;
– extraction of natural resources;
– for packaging from polystyrene foam and foam plastic raw materials.

Other amendments provide for:

  •  supplement the conditions for the application of DRN in relation to plastic and composite packaging, determine the DRN rate for composite cardboard packaging as plastic packaging;
  •  regulations for the creation and application of the producer’s extended liability system for textile products;
  •  clarify the application of the DRN for the emission of particles PM10 in the air, determining the application of the DRN for total dust emissions (PM), as well as for batteries and accumulators, observing the new types and wordings;
  • specify the entry into force of the exemption from DRN payment after the conclusion of the contract with the deposit system operator for participation in the deposit system;
  •  clarify the requirements for a foreign person to participate in the manufacturer’s extended liability system;
  •  to specify the application of the DRN in relation to the savings to cover the DRN and its calculation for waste disposal after placement in the bioreactor.

Gambling tax
20% increase in rates

  • gambling machines;
  • roulette, card and dice game;
  • for interactive gambling.

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