WorldTax Compareโ† All Comparisons

Iceland vs Latvia
Tax Rate Comparison

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

๐Ÿ‡ฎ๐Ÿ‡ธ Iceland
vs
๐Ÿ‡ฑ๐Ÿ‡ป Latvia
Tax Year:

๐Ÿ’ฐ Personal Income Tax Calculator

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

Enter your annual income above to see your personal tax comparison โ†’
Individual Income Tax (Top Marginal Rate)
Top Income Tax Rate
~36.94%
Stable; municipal rates adjusting slightly
No change
20โ€“31%
31% top; NATO spending affecting fiscal balance
No change
VAT / GST / Sales Tax
VAT / GST / Sales Tax
11โ€“24%
Standard 24% maintained; EEA rules apply
No change
12โ€“21%
21% standard maintained
No change
Corporate Tax Rate
Corporate Tax Rate
20%
20% stable
No change
20%
20% distributed profits; Pillar Two active
No change
Capital Gains Tax
Capital Gains Tax
22%
22% capital income rate
No change
20%
20% as income
No change
Social Security & Payroll
Social Security / Payroll
~14.5%
Pension reform debate; high mandatory rates maintained
No change
~35.09%
Contribution rates stable; pension II pillar growing
No change
State, Regional & Local Taxes

๐Ÿ‡ฎ๐Ÿ‡ธ Iceland โ€” Municipal Income Tax

Iceland's 69 municipalities set their own local income tax rates, ranging from ~12.44% to ~14.52%, averaging ~14.45%. This is added to the national income tax. The combined effective rate for most earners is about 36.94% (national + municipal). Iceland has no inheritance tax on direct heirs. Real estate transfer tax (stimpilgjald) is 0.8% on property transfers. Iceland is not an EU member but belongs to the EEA, affecting VAT and trade rules.

๐Ÿ‡ฑ๐Ÿ‡ป Latvia โ€” Municipal Income Tax

Latvia's 119 municipalities levy a local income tax portion โ€” 80% of income tax goes to municipalities, 20% to the state. The effective split means municipalities directly benefit from local earnings. Property tax (nekustamฤ ฤซpaลกuma nodoklis) is set by municipalities at 0.2%โ€“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.

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

Iceland vs Latvia: Key Tax Differences (2026)

๐Ÿ’ฐ Income Tax: ๐Ÿ‡ฎ๐Ÿ‡ธ Iceland has a higher top income tax rate (~36.94% vs 20โ€“31%). ๐Ÿ‡ฑ๐Ÿ‡ป Latvia is more favourable for high earners.

๐Ÿ›’ VAT/Sales Tax: Iceland has a higher consumption tax (11โ€“24% vs 12โ€“21%).

๐Ÿข Corporate Tax: Corporate rates are similar in both countries (20% vs 20%).

๐Ÿ“ˆ Capital Gains: ๐Ÿ‡ฑ๐Ÿ‡ป Latvia taxes investment gains at a lower rate (20% vs 22%), benefiting investors.

Related Comparisons

๐Ÿ‡จ๐Ÿ‡ฆ Canada vs ๐Ÿ‡ฎ๐Ÿ‡ธ IcelandTax comparison๐Ÿ‡จ๐Ÿ‡ฆ Canada vs ๐Ÿ‡ฑ๐Ÿ‡ป LatviaTax comparison๐Ÿ‡ฉ๐Ÿ‡ฐ Denmark vs ๐Ÿ‡ฎ๐Ÿ‡ธ IcelandTax comparison๐Ÿ‡ช๐Ÿ‡ช Estonia vs ๐Ÿ‡ฑ๐Ÿ‡ป LatviaTax comparison๐Ÿ‡ซ๐Ÿ‡ฎ Finland vs ๐Ÿ‡ฎ๐Ÿ‡ธ IcelandTax comparison๐Ÿ‡ฉ๐Ÿ‡ช Germany vs ๐Ÿ‡ฎ๐Ÿ‡ธ IcelandTax comparison๐Ÿ‡ฉ๐Ÿ‡ช Germany vs ๐Ÿ‡ฑ๐Ÿ‡ป LatviaTax comparison๐Ÿ‡ฎ๐Ÿ‡ธ Iceland vs ๐Ÿ‡ณ๐Ÿ‡ฑ NetherlandsTax comparison๐Ÿ‡ฎ๐Ÿ‡ธ Iceland vs ๐Ÿ‡ณ๐Ÿ‡ด NorwayTax comparison๐Ÿ‡ฎ๐Ÿ‡ธ Iceland vs ๐Ÿ‡ธ๐Ÿ‡ช SwedenTax comparison๐Ÿ‡ฎ๐Ÿ‡ธ Iceland vs ๐Ÿ‡ฌ๐Ÿ‡ง United KingdomTax comparison๐Ÿ‡ฎ๐Ÿ‡ธ Iceland vs ๐Ÿ‡บ๐Ÿ‡ธ United StatesTax comparison