Financial Services, Latvia, Legislation, Taxation

The differentiated non-taxable minimum income will be introduced January 1, 2016. The Finance Ministry said earlier that the fiscal impact of the differentiated non-taxable minimum income from January 1, 2016, considering the terms of payment, will be additional EUR 5.86 million in 2017, including EUR 1.17 million in the general government budget, and EUR 4.69 million in the local government budget.

The differentiated non-taxable minimum income will depend on a taxpayer's total annual income. Low-income earners, after submitting their tax returns to the State Revenue Service, will be compensated for the amount overpaid in the preceding year.

The bill also provides for lifting tax allowances for adult dependants. The fiscal impact of the proposal to lift tax allowances for adult dependants, except for adults who continue their education and disabled adults, in 2016 and coming years is planned at EUR 25 million, including EUR 5 million in the general government budget and EUR 20 million in the local government budget.