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Estonia vs Latvia
Tax Rate Comparison

Enter your income below for a personal tax estimate, then scroll down for full rate breakdowns.

πŸ‡ͺπŸ‡ͺ Estonia
vs
πŸ‡±πŸ‡» Latvia
Tax Year:

πŸ’° Personal Income Tax Calculator

Enter your income to see your estimated annual tax liability in each country β€” side by side.

Enter your annual income above to see your personal tax comparison β†’
Individual Income Tax (Top Marginal Rate)
Top Income Tax Rate
22%
22% national + local supplement; defence spending driving rate increases
No change
20–31%
31% top; NATO spending affecting fiscal balance
No change
VAT / GST / Sales Tax
VAT / GST / Sales Tax
9–24%
24% standard; defence-driven fiscal pressure
No change
12–21%
21% standard maintained
No change
Corporate Tax Rate
Corporate Tax Rate
22%
22% on distributed profits; retained earnings still 0%
No change
20%
20% distributed profits; Pillar Two active
No change
Capital Gains Tax
Capital Gains Tax
22%
22% as income
No change
20%
20% as income
No change
Social Security & Payroll
Social Security / Payroll
~33%
33% social tax maintained; III pillar voluntary pension growing
No change
~35.09%
Contribution rates stable; pension II pillar growing
No change
State, Regional & Local Taxes

πŸ‡ͺπŸ‡ͺ Estonia β€” Local Income Tax Supplement

Estonia's 79 local governments levy a local income tax supplement of 11.4% of taxable income (2024), collected alongside the national 20% income tax. Together these form the effective total income tax. Estonia's unique fully distributed profit taxation system means companies pay no corporate income tax on retained earnings β€” only on distributed profits (dividends). This has driven significant foreign investment. Land tax (maamaks) is levied at 0.1%–2.5% of assessed land value by municipalities.

πŸ‡±πŸ‡» Latvia β€” Municipal Income Tax

Latvia's 119 municipalities levy a local income tax portion β€” 80% of income tax goes to municipalities, 20% to the state. The effective split means municipalities directly benefit from local earnings. Property tax (nekustamā Δ«paΕ‘uma nodoklis) is set by municipalities at 0.2%–3% of cadastral value. Latvia uses the progressive income tax system introduced in 2018 (replacing the flat 23%). Vehicle tax and business risk duty are national.

⚠️ Disclaimer: Rates shown are standard top/headline rates for informational purposes. Actual tax liability depends on income level, residency, deductions, and tax treaties. 2025–2026 data reflects announced or enacted rates and may be subject to change. Not financial or legal advice.

Estonia vs Latvia: Key Tax Differences (2026)

πŸ’° Income Tax: πŸ‡±πŸ‡» Latvia has a higher top income tax rate (22% vs 20–31%). πŸ‡ͺπŸ‡ͺ Estonia is more favourable for high earners.

πŸ›’ VAT/Sales Tax: Estonia has a higher consumption tax (9–24% vs 12–21%).

🏒 Corporate Tax: πŸ‡±πŸ‡» Latvia offers a lower corporate rate (20% vs 22%), which can influence business location decisions.

πŸ“ˆ Capital Gains: πŸ‡±πŸ‡» Latvia taxes investment gains at a lower rate (20% vs 22%), benefiting investors.

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