Starting March 1, Latvian residents can submit their income declarations, with changes suggesting that tax reimbursements may not occur this year as in previous years.
Starting from March 1, residents of Latvia will be able to submit their yearly income declarations to the State Revenue Service (VID). Last year, almost 917,000 people submitted their income declarations, with tax refunds totaling around 311 million euros returned to citizens. However, a significant number also faced tax debts, leading to 92.5 million euros needing to be paid back to the state budget. This year sees potential changes as the tax system evolves, with the elimination of the differentiated non-taxable minimum affecting income reimbursement outcomes.
Tax Authority official Sandra Podniece reported that last year, on the very first day of submission, over 300,600 citizens filed their income declarations. Tax refunds are expected to be processed within three months. However, in contrast to previous years, there is a possibility that residents may not receive tax refunds due to the removal of the varying non-taxable minimum. This change simplifies the tax system, establishing a fixed non-taxable minimum applicable to all, which will be set at 510 euros per month starting 2025, regardless of the amount of income earned.
The adjustments in the tax system could have significant implications for taxpayers this year. With a unified and fixed non-taxable minimum, many individuals might not experience the same level of tax reimbursements they previously did. This development underscores the importance for taxpayers to understand the new rules as they prepare their income declarations, to avoid surprises with potential tax debts instead of refunds as has been common in prior years.
