Latvia taxes profit only when a company distributes it, which is the same model as Estonia. That changes the compliance calendar. There is no annual corporate income tax return for retained earnings, but there is a monthly declaration whenever profit is distributed or a deemed distribution occurs. The annual report is also filed with the State Revenue Service (VID) through its electronic declaration system, not directly with the Enterprise Register, which surprises many foreign groups.

This guide covers the limited liability company (sabiedrība ar ierobežotu atbildību, SIA), the usual vehicle for a foreign-owned subsidiary, and notes where the joint-stock company (AS) and a branch differ. It is written for founders and for legal, finance and operations teams.

Updated November 9, 2026. Latvian sources disagree on the exact annual report date for 2026, so this guide separates the statutory rule from the date that the VID has published for the current year. Confirm it in the electronic declaration system.

Entity compliance Latvia: the quick answer

• File the annual report through the VID electronic declaration system (EDS). The law sets four months after year-end for many companies, which is 30 April for a calendar-year company, while a Latvian adviser published 31 May 2026 as the deadline for the current year.

• Have the shareholders approve the report and file it within one month of approval, and no later than the statutory limit.

• File the corporate income tax declaration by the 20th of the month after a distribution or deemed distribution, and pay at 20 percent of the gross amount.

• File VAT and payroll declarations monthly, and keep the beneficial owner information at the Enterprise Register current.

What determines a Latvian company's compliance requirements?

Size, activity and tax regime decide the work. Small companies prepare simplified statements, while medium and large companies need an audit and longer filing periods. Professional sources describe seven months for larger companies, and a pats.lv calendar mentions 31 July for larger companies with higher turnover. Check the category with your accountant, because the thresholds change.

The tax regime matters too. Latvia applies a zero rate to retained profit and 20 percent to the gross distributed amount, which professional sources describe as 0.2/0.8 on the net dividend. Deemed distributions include non-business expenses, certain loans to related parties and some transfer pricing adjustments. Micro-enterprise status exists for qualifying small businesses and uses a different turnover-based regime.

Annual entity requirements in Latvia: the core checklist

1. Annual report

The Law on Annual Financial Statements and Consolidated Financial Statements requires the annual report to be approved by the shareholders and filed with the VID within one month of approval and no later than four months after the reporting year. For a calendar-year company, that points to 30 April. Another professional source says that for 2026 most small and medium SIA companies must file by 31 May, and larger companies by 31 July, which probably reflects an extension, so confirm the date in EDS. The report includes a balance sheet, a profit and loss account and notes, and professional sources warn that it cannot be amended after submission.

2. Audit and shareholder approval

Medium and large companies need an audit before approval. Small companies may be exempt unless another rule applies. Hold the shareholder decision before the filing date and keep the signed report, the management report where required and the decision. The report must be in Latvian and in euros.

3. Corporate income tax on distributions

Companies file the corporate income tax declaration by the 20th of the month after the month in which a distribution or deemed distribution arose. Professional sources describe the rate as 20 percent of the gross amount. Credit institutions and consumer lenders pay an annual amount from 2024 instead. Because the tax arises on the event and not on the year-end, track dividends, loans to shareholders, non-deductible expenses and write-offs through the year.

4. VAT

VAT-registered companies file monthly or quarterly returns by the 20th of the following month, according to professional sources. The standard rate is 21 percent and the registration threshold is higher than in many EU countries, but confirm both with the VID, because Latvia has changed rates and thresholds recently.

5. Payroll and beneficial owners

Payroll declarations and personal income tax are due monthly, with professional sources giving the 23rd. Companies also report beneficial owners to the Enterprise Register and update the information after changes, which professional sources place within a short period of a few weeks. Check the current period.

Tax and indirect tax obligations

Employers pay social insurance contributions and withhold personal income tax, with progressive rates and an additional rate on high incomes. Payments to non-residents, such as management fees at 20 percent according to professional sources, can attract withholding tax, and payments to low-tax or blacklisted jurisdictions are treated more strictly. Capital gains are taxed only when profit is distributed.

Transfer pricing rules require arm's-length terms and documentation above thresholds. A foreign-owned SIA that borrows from its parent or pays service fees should keep contracts, invoices and benchmarking support.

Foreign-owned subsidiaries

Foreign persons can own Latvian companies. An SIA needs a legal address in Latvia, at least one board member and the registered share capital, and foreign corporate shareholders provide apostilled documents with translations. Founders can register through the Enterprise Register and the company then registers with the VID for tax.

Banks apply strict due diligence to foreign-owned accounts and ask for beneficial owner evidence and business substance. A board based abroad can raise tax residence and permanent establishment questions, so document where decisions are taken.

First-year and event-triggered obligations

In the first year, the company is registered, receives its registration number, registers with the VID for VAT and payroll if needed, opens a bank account and registers its beneficial owners. The first reporting year can be shorter or longer than twelve months within the limits of the law.

Events that trigger filings include a change of board members, a share transfer, a capital change, a change of legal address, a merger and a liquidation. Each is filed with the Enterprise Register, and ownership changes affect the beneficial owner data.

Employment and local requirements

Latvian employers register employees with the VID before work starts, pay social insurance contributions and give written contracts. Employees have statutory minimum wage, at least four weeks of paid annual leave and notice rights, and collective agreements apply in some sectors. Many foreign-owned subsidiaries use a local payroll provider.

Record-keeping and governance in Latvia

Latvian accounting law requires companies to keep supporting documents and ledgers for several years, and professional sources give different periods for different document types, so ask your accountant for the schedule. The board is responsible for the books. Keep invoices, contracts, bank statements and the shareholder decisions together, and record who holds the EDS credentials. Because tax can arise from a loan or an expense that was never labelled a dividend, review shareholder transactions every quarter.

Build a compliance calendar for Latvia

A compliance calendar turns the rules above into dated tasks with named owners. Start from the financial year-end and the incorporation anniversary, then add the recurring monthly and quarterly items. Review it each quarter, because deadlines, extensions and registry systems change.

• January to March: close the books, review shareholder transactions and prepare the annual report.

• By the 20th of each month: file VAT returns and corporate income tax declarations for any distribution.

• By the 23rd of each month: file payroll and personal income tax declarations.

• By 30 April or the date published for the year: file the approved annual report in EDS.

• Before approval: complete the audit if required.

• After any change: update the Enterprise Register and beneficial owner data.

Common mistakes

• Assuming there is no tax filing because retained profit is not taxed.

• Overlooking deemed distributions such as non-business expenses and related-party loans.

• Using an out-of-date annual report deadline.

• Filing the report with the wrong authority.

• Trying to amend the report after submission.

• Missing the board or beneficial owner update.

Entity compliance Latvia: frequently asked questions

Where is the Latvian annual report filed?

Through the State Revenue Service electronic declaration system.

When is the annual report due?

The law gives four months after year-end, while a Latvian adviser published 31 May 2026 for the current year, so confirm the date in EDS.

What is the corporate income tax rate?

20 percent of the gross distributed amount, and zero on retained profit.

When is the corporate income tax declaration due?

By the 20th of the month after a distribution or deemed distribution.

Is an audit required?

Medium and large companies need an audit, and small companies may be exempt.

Can the annual report be amended?

Professional sources say it cannot be amended after submission.

How CoverPin can help

CoverPin helps finance, legal and operations teams track entity obligations across countries. See our international entities overview, learn about compliance advisory, or browse more guides in our legal and compliance resources.

This article is general information, not legal, tax or accounting advice. Confirm current requirements with the relevant authority or a qualified local adviser before acting.