Latvia

Latvia's Rankings
CategoryRankScore
Overall Rank386.05
Corporate Taxes1100
Individual Taxes688.27
Consumption Taxes2960.95
Property Taxes682.43
International Tax Rules787.83

Latvia ranks 3rd overall on the 2019 International Tax Competitiveness Index, one spot worse than in 2018.


Strengths

  • Latvia's corporate income tax system only taxes distributed earnings, allowing companies to reinvest their profits tax-free.
  • Corporations can deduct property taxes when calculating taxable income.
  • Latvia's taxes on labor are relatively flat, allowing the government to raise revenue from taxes on workers with very few distortions.

Weaknesses

  • Latvia's network of tax treaties includes 61 countries, a relatively low number.
  • The VAT of 21 percent applies to approximately half of the potential tax base.
  • The threshold at which the VAT applies is nearly twice as high as the average VAT threshold for OECD countries.

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