|International Tax Rules||7||87.83|
Latvia ranks 3rd overall on the 2019 International Tax Competitiveness Index, one spot worse than in 2018.
- 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.
- 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.