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Latvian Saeima supports proposal on extending PIT tax surcharge term

Mārtiņš Bondars/flickr.com
On Wednesday, 13 March, Saeima’s Budget and Finance Committee conceptually supported amendments to the Personal Income Tax Law. Approved amendments say the surcharge in declarations for 2018 and 2019 will be allowed to be paid by 1 December 2020, as reported by Saeima press-service.

It is planned that the term extension will be available to taxpayers whose tax surcharge comes from changes to the differentiated tax minimum and whose annual income does not exceed EUR 20,004. This will mostly applied to small wage and royalties recipients as long as the person does not receive other forms of income.

As for the people who have a duty to submit annual income declaration and pay PIT surcharge – businessmen and the like – still have the same tax payment regime will remain.

Amendments to the law are needed to resolve the situation when some taxpayers might experience difficulties with paying PIT surcharge for 2018 and 2019. The tax surcharge forms depending on the taxpayer’s calculated differentiated non-taxable minimum.

With 1 January 2018, monthly non-taxable minimum was replaced with State Revenue Service’s predicted monthly non-taxable minimum. Annual differentiated non-taxable minimum is calculated and applied in summary order as residents submit their income declaration, as stated in the annotation to the draft.

Budget committee decided to ask the Saeima to add amendments to the law to its 14 March meeting’s agenda. The second last reading is planned to be held by the Saeima on 21 March, as confirmed by Finance and Budget Committee’s chairman Mārtiņš Bondars.


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