Dividend Calculator 2026 — CIT and PIT for a Latvian SIA

Calculated dividends are a taxable object of corporate income tax (CIT) (CIT Law, Art. 4(2) point 1 "a"). In the general regime the dividend is divided by the coefficient 0.8 and 20% is applied to the base (Art. 3(1), Art. 4(9)), which is 25% of the dividend; the dividend is not subject to personal income tax (PIT) for the owner if CIT has been paid on it under the CIT Law (PIT Law, Art. 9(1) point 2.¹ "a"); the exemption does not apply if the dividends are paid through a structure (a commercial company, another legal person or a foreign company) or a chain of structures set up solely or mainly for that purpose, in order to avoid income tax payments or reduce them (Art. 9(3.⁸)). In the alternative regime CIT is 15% of the base (dividend ÷ 0.85), and PIT of 6% of the dividend paid applies in addition (CIT Law, Article 4.²; PIT Law, Art. 15(5.¹)).

A taxpayer whose participants in the taxation period in which the dividends are calculated are only natural persons may choose the alternative 15% rate for the dividends calculated in that period (CIT Law, Art. 4.²(1), Art. 3(5)); the base is determined by dividing the dividend by 0.85 (Art. 4.²(2)). The taxation period is a calendar month, or a quarter if the taxpayer may book supporting documents once a quarter (Art. 3(2), (3)). The regime applies from 1 January 2026. Agree how to apply the choice in a given period with your accountant.

For the same profit that is fully spent on dividends and CIT, the alternative regime gives the owner slightly less, not more, in this example. If the company spends €10,000.00 of profit on dividends and CIT, the owner receives €8,000.00 in the general regime and €7,990.00 in the alternative one; the tax burden is 20.00% and 20.10%. The 15% and 6% rates cannot be added up and compared with 20%, because they are applied to different bases. A taxpayer whose participants in the taxation period in which the dividends are calculated are only natural persons is entitled to choose the alternative rate (Art. 4.²(1)).

CIT is not calculated on undistributed profit as such, because the taxable objects are distributed profit (calculated dividends, payments equated to dividends, conditional dividends) and deemed distributed profit (Art. 4(2)). Deemed distributed profit also includes expenses not related to business activity (Art. 4(2) point 2 "a", Art. 8), so "undistributed profit" does not mean that no CIT is calculated at all. Such expenses are not included if PIT has been withheld from them (Art. 4(3)).

Dividends are determined by a resolution of the shareholders’ meeting (Commercial Law, Art. 161(1.¹)); the meeting decides on the use of profit after the annual report has been approved (Art. 180(4)). Extraordinary dividends are possible if the articles of association provide for them (Art. 161.¹(1)). For extraordinary dividends Commercial Law Art. 161.¹ sets several conditions, including: the resolution is adopted no earlier than three months after the previous dividend resolution and no later than three months after the end of the reporting period (para. 6); at most 85% of the profit of that period may be paid out as extraordinary dividends (para. 3.¹); the board prepares a business-activity report and a proposal (para. 4) and confirms that the financial position has not deteriorated materially and that the payout poses no risk to the company’s obligations (para. 7); on the day of the resolution the company must have no tax debts, no deferred or instalment tax payments, and its advance tax payments must not be reduced (para. 8); an SIA that meets the conditions of Art. 185.¹(1) (a reduced-capital SIA) may not pay extraordinary dividends (para. 9). Dividends may not be determined, calculated or paid if the annual report or the business-activity report shows that equity is lower than share capital (Art. 161(4)).

No. If the CIT calculated for the reporting year is below EUR 50, the taxpayer states the difference up to EUR 50 in the return for the last taxation period of the reporting year, unless one of the exceptions in the law applies (CIT Law, Art. 17(11), (12)). The calculator also does not model non-resident or legal-entity participants, payments equated to dividends and conditional dividends, profit shown in the balance sheet at 31 December 2017 (transitional provision 8), or the 3% PIT surcharge on annual income above EUR 200,000 (PIT Law, Art. 15.¹). Consult an accountant for such cases.

No, this calculator does not compare salary. Salary taxes are calculated in the salary calculator; discuss the choice of how to pay yourself with your accountant.