Financial Services, Latvia, Legislation, Markets and Companies, Taxation

International Internet Magazine. Baltic States news & analytics Thursday, 17.10.2019, 03:41

Latvian government approves of solidarity tax

BC, Riga, 23.09.2015.Print version
The government of Latvia approved on September 22nd 2015 of the so-called Solidarity Tax, which has been widely criticized by business owners, reports LETA.

As of January 1, 2016, the tax will be imposed on high-income earners with a monthly salary above EUR 4,000, which currently is the maximum taxable income in Latvia.

 

According to estimates based on data from 2014, the new tax would affect about 4,700 taxpayers.

 

Earnings that exceed the maximum taxable income of EUR 4,000, will be applied with the same rate as in the case of general social contributions – 34.09%, 23.59% of which will be paid by the employer and 10.5% – by the employee.

 

Unlike other social contributions, the solidarity tax revenue will go into the general budget. This means that solidarity taxpayers will gain no privilege over social guarantees (pensions, unemployment benefits, maternity leave, sick leave, etc.).

 

By implementing the solidarity tax as of January 1, 2016, the annual fiscal impact would amount to an additional EUR 40.9 million, but in 2017 and 2018 – to EUR 46.095 million.






Search site