Legislative Changes in Latvia in 2026
The year 2026 in Latvian legislation does not bring major or revolutionary changes. It is a continuation of what was started in previous years. Several tax rates will change—minimum wage, non-taxable minimum, VAT, etc., affecting both a broader segment of society and very specific cases and industries.
Although taxes are what most impact businesses and accountants' work, a survey conducted by Jumis Pro revealed that issues directly related to digitalization concern the majority of companies. Participants—accountants—had the opportunity to answer which changes would affect their company the most, marking several options.
For example, about 60% of surveyed accountants noted that the need to use e-invoices with state institutions would have the most impact. Similarly, close to 50% indicated that changes in the EDS authentication procedure (no longer being able to use a username and password) would also affect the company's daily operations. Only after these came the minimum wage and the alternative tax regime related to CIT. However, let us look at the main legislative changes in 2026 that will affect a large part of society.
Increase in Minimum Wage
For every employee, it is important how much they receive when the work is done. To improve residents' welfare and income levels, starting from January 1, 2026, the minimum wage amount changes: the minimum monthly gross wage is increased from €740 to €780 per month.
Who does this apply to?
The minimum wage applies to all employees working full-time and whose contracts specify the minimum wage rate. It is mandatory for all employers regardless of industry or company size.
Fixed and Higher Non-Taxable Minimum
Raising the minimum wage is not the only tool the state can use to improve residents' living standards. Starting from January 1, 2026, the non-taxable minimum also changes: it is raised to €550 per month from the previous €510.
These changes affect every employee, and it is important for accountants to ensure that the new calculation is applied. If a company uses accounting software, it is essential to check whether its provider has updated it in accordance with the latest legislation.
Jumis offers a tool to check potential salary amounts at any time -> salary calculator.
Personal Income Tax (PIT) on Dividends
Changes in legislation also affect companies, especially those paying dividends to their owners. From 2026, Latvia will allow choosing an alternative corporate income tax (CIT) regime. What does this mean?
- The usual regime is when a company pays corporate income tax (CIT) to the state, which is fixed at 20% of profits. If the company pays dividends, the recipients do not have to pay any taxes on them.
- The alternative corporate income tax (CIT) regime provides that the company pays a lower CIT—15% of profits. However, owners receiving dividends must pay personal income tax (PIT) at a rate of 6% on the amount of dividends.
Why might this be beneficial?
- The alternative regime allows reducing CIT from 20% to 15%, meaning the company initially retains more money for business operations and can invest in business development or investments rather than immediately paying taxes.
Who can use this regime?
- Only small and medium-sized enterprises whose shareholders are natural persons; they must not operate in specially regulated industries (e.g., financial sector or energy).
Important: the choice is voluntary, and many factors must be considered to ensure that the alternative regime is beneficial. To apply this regime, the company must inform the SRS about its application.
Changes in Value Added Tax (VAT)
There are taxes that, if not affecting the entire society, impact a large part of it. They are applied to items we regularly purchase, so we feel their changes the most. One such tax is the value-added tax (VAT). In 2026, value-added tax (VAT) changes in two ways.
- Starting January 1, the special regime for books is canceled—5% VAT remains only for books published in Latvian or certain EU/OECD country languages. This means that books in Russian will have a VAT of 21%.
- Starting July 1, a reduced VAT rate of 12% will be applied to certain food groups. This will apply to bread, milk, fresh poultry meat, and eggs.
Companies operating in publishing, retail, and wholesale sectors should pay special attention to ensure the specified changes are reflected in prices.
Increase in Excise Tax
In 2026, the excise tax continues to rise for alcohol, tobacco, e-cigarettes, and fuel.
- The excise tax rate for alcohol in Latvia will increase starting March 1, 2026—it varies based on alcohol concentration. For example, the excise tax for wine per 100 L will increase from €134 to €148.
- Excise rates for tobacco products will also increase, depending on their type. For example, the minimum excise tax level for cigarettes per 1,000 units will rise from €171.9 to €197.7.
- The rate for e-cigarette nicotine liquid will be €0.35 per milliliter.
- The fuel excise tax will increase prices by a few cents per liter of fuel (approximately 2.7–3.2 cents/liter, depending on the type of fuel).
Natural Resource Tax (NRT)
The Natural Resource Tax (NRT) is a tax paid for the extraction or use of various natural resources. From January 1, 2026, several NRT rates in Latvia will increase:
- for soil, sand, sand-gravel, clay, and coloring earth;
- for freshwater limestone, dolomite, gypsum, and boulders;
- for household waste disposal.
Exact amounts vary depending on the type of resource, as the tax is set in euros per unit (e.g., per cubic meter or ton), not as a percentage.
For example, the tax rate for sand and sand-gravel increases by about 25%, which is approximately €0.10 more per cubic meter than before. For household waste disposal, the NRT rate increases from €110 per ton to €130 per ton, meaning a €10–20 increase per ton compared to previous years.
Who is this relevant for?
- construction companies using sand, gravel, and other materials;
- resource extraction companies (land and raw material extraction);
- waste management companies (as landfill service costs increase due to the NRT component);
- local municipalities and residents—indirectly, as changes may affect waste management fees.
Tax Administration and Compliance with Regulatory Requirements
To continue improving the SRS's operations and business oversight, several changes have been made in 2026:
Higher late payment threshold: from €15 to an amount exceeding debt recovery costs. Currently, this is about €40, but it may change. However, the SRS can still apply interest for late payments.
- SRS Rights
If a company offers services avoiding tax payments → the SRS can block the website.
- Reporting Obligations
Increased control over the construction and service sectors, especially in VAT—now it is necessary to report each transaction precisely in the VAT declaration.
Who does this apply to?
- All taxpayers: LLCs, sole proprietors, micro-enterprises, individual merchants.
- Particularly important for companies with high VAT turnover or those in construction, wholesale, and food sectors.
Other Important Legislative Changes
E-Invoices with State Institutions
The transition period for e-invoices in transactions with the state and between its institutions ended in 2025. Thus, starting January 1, 2026, this requirement became mandatory.
The Jumis Pro survey shows that accountants still have significant uncertainties about the requirements for e-invoices, how to send and receive them—almost 70% of survey participants lack clarity on this. Considering that starting from 2028, e-invoices will also become mandatory between companies, there is a long way to go to make the process understandable.
Changes in EDS Authentication
From January 1, 2026, it will no longer be possible to log in to the SRS EDS using a username and password. The goal is to improve security and protect data, as passwords are much less secure than certified electronic identification tools.
To log in to the EDS, one of the following secure identification tools must be used:
- Smart-ID (qualified version);
- Electronic identification card (eID);
- Secure electronic signature (e.g., eParaksts or eParaksts mobile);
- Authentication via certain internet banks (temporary solution until 31.12.2026).
The year 2026 in Latvia brings several changes affecting both residents and businesses—from increases in minimum wage and non-taxable minimum to VAT, excise, and e-invoice requirements. To prepare for the new legislation, it is important to review financial and accounting procedures, follow SRS guidelines, and adapt to digitalization requirements in a timely manner.
Read more about the legislative changes on the official Cabinet of Ministers website.
Frequently Asked Questions (FAQ)
What is the minimum wage in Latvia in 2026?
From January 1, 2026, the minimum monthly gross wage is increased from €740 to €780.
What changes in the non-taxable minimum in 2026?
The non-taxable minimum is raised from €510 to €550 per month, meaning a smaller portion of most employees' salaries will be subject to PIT.
Who is required to use e-invoices in Latvia?
From January 1, 2026, e-invoices become mandatory for all companies conducting transactions with state institutions. Full mandatory B2B requirements will come into effect in 2028.
How to log in to the SRS EDS in 2026?
It will no longer be possible to use a username and password. Available secure authentication methods:
- Smart-ID (qualified version);
- eID card;
- eParaksts or eParaksts mobile;
- Authentication via certain internet banks (temporary solution until 31.12.2026).