Shipping taxation in Latvia: One of the most attractive shipping taxation regimes in the EU

Latvia has one of the most attractive shipping taxation regimes in the EU. If the usual company has income it must pay corporate income tax 15 %. Shipping companies registered under the Latvian flag have possibility to obtain Tonnage Tax payer status within the Tax authority and to pay flat fate tax based on the net tonnage – Tonnage Tax. Therefore the amount of the paid tax will be smaller.

So if this ship is working all the year the tax will be calculated as follows: Net tonnage * coefficients * exploitation days * tax 15%

Income coefficient expressed in EUR per net tonnage and shall be applied as follows:

Crew taxation in Latvia

The income and social tax shall be paid in Latvia. (23% personal income tax and mandatory state social insurance contributions 23, 59 % paid by employer and 10, 50% paid by employee). But, for the month of the taxation year in which the person was employed (in employment relations) on a ship utilized in international transport, the income of the referred to person for whom salary tax has to be paid shall be the part of the income obtained on the basis of employment relations in the following amount:

• to officers – in the amount of 2.5 monthly minimum salaries determined by the Cabinet;
• to other personnel – in the amount of 1.5 monthly minimum salaries determined by the Cabinet.

Therefore in according to law if the employee is working on the international transport ship the salary per 1 month will be calculated in the following way:

• for officers -  will be calculated from 900 EUR.
• for other - will be calculated from 540 EUR.

Eduards Dzintars, attorney at law of the Gencs Valters Law Firm in Riga.

Practising in fields of Shipping Taxation in Latvia, Estonia, Lithuania

T: +371 67 24 00 90  
F: +371 67 24 00 91

eduards.dzintars@gencs.eu

www.gencs.eu