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Dividend Tax Calculator 2026 —
CIT & PIT for Latvia LLC

Calculate taxes on Latvia LLC dividends in 2026. Standard CIT regime (20%) or the alternative regime (15%+6%) — see the owner's net payout and compare dividends vs. salary.

Standard CIT regime (20%) Alternative regime (15%+6%) Dividends vs. Salary
€
Pay dividends (not reinvest) Applies CIT at distribution time
Prior year losses Can offset current year profit
Net payout to owner
— €
—
Company level
Profit before CIT—
Deductible losses—
CIT (20%)—
Profit after CIT (dividend base)—
Owner level
Gross dividends—
PIT on dividends (6%)—
Net dividends—
Dividend Tax Calculator Latvia 2026 — Balansis

Dividend Taxes for Latvia LLC in 2026 — Full Explanation

Latvia LLC dividends involve two tax stages: CIT at company level and PIT (in some cases) at owner level. From 2026 there are two legally valid models.

Model A — Standard CIT Regime (20%)

Applies to all LLC regardless of shareholder type. CIT rate: 20% (coefficient 0.80). No separate PIT on dividend receipt in standard model.

// Model A — Standard CIT 20%
CIT = profit / 0.80 × 0.20 = profit × 0.25 (effective)
Net dividends = profit − CIT
// Example: €20 000 → CIT = €5 000, net = €15 000

Model B — Alternative Regime (15%+6%) — CIT Law art. 4.2

Available only for LLC where all shareholders are physical persons (CIT Law art. 4.2, in force 01.01.2026). CIT: 15% (coefficient 0.85). PIT: 6% — withheld by the company at payment time (CIT art. 16 s.5).

// Model B — Alternative 15%+6%
CIT = profit / 0.85 × 0.15 ≈ profit × 0.1765 (effective)
afterCIT = profit − CIT
PIT (6%) = afterCIT × 0.06
Net dividends = afterCIT − PIT
// Example: €16 000 → CIT=2 823.53, afterCIT=13 176.47, PIT=790.59, net=12 385.88

What Is the 0% CIT Regime?

Latvia uses a unique CIT model: CIT is not due on retained earnings. As long as profits remain in the company and are reinvested, there is no tax. CIT only becomes payable when profits are distributed.

Dividends vs. Salary — Which Model Is Better?

Dividends are more advantageous when the company has stable profit and the owner does not need social insurance coverage. No SSIC applies to dividends.

Salary is better when social guarantees (pension, sick pay) are needed, or when company profit is small.

Optimal model for most LLC owners: minimum salary (€780 gross) + remainder as dividends.

Frequently Asked Questions about Dividends

Are dividends subject to SSIC contributions?
No. Dividends are not employment income, so SSIC does not apply. This is why dividends can be more tax-efficient than a high salary.
What is the difference between the standard and alternative CIT regime?
Standard regime (Model A): CIT 20% on taxable profit; no additional PIT on dividends received. Alternative regime (Model B, CIT art. 4.2): available only to LLC where all shareholders are physical persons — CIT 15% (coefficient 0.85) + PIT 6% withheld at payment time. Which is more favourable depends on the specific situation — use the calculator to compare.
How often can dividends be paid?
Annual dividends can be paid after the annual report is approved (usually April–May). Interim dividends are possible if the articles permit and 6 months have passed since the last report.
How does Latvia's 0% CIT affect dividends?
In Latvia CIT is payable only when profit is distributed. If profit is reinvested, there is no CIT. The longer dividend payment is deferred, the longer the funds can be used for business growth.
When is salary more advantageous than dividends?
Salary is better when social guarantees (pension, sick pay) are needed, or when company profit is small. The optimal model for most LLC owners: minimum salary €780 + remainder as dividends.

Disclaimer — calculator results are indicative only

This calculator uses 2026 Latvia tax rates and provides an approximate result for informational purposes only. Results do not replace the professional advice of a certified accountant or tax consultant. Your individual situation (employment type, exemptions, international aspects, contract structure, etc.) may significantly affect actual tax amounts. Balansis (SIA Wonderstore) accepts no liability for decisions made solely on the basis of this tool.

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