Latvia vs Iceland
Tax Rate Comparison
Enter your income below for a personal tax estimate, then scroll down for full rate breakdowns.
💰 Personal Income Tax Calculator
Enter your income to see your estimated annual tax liability in each country — side by side.
Individual Income Tax (Top Marginal Rate)
VAT / GST / Sales Tax
Corporate Tax Rate
Capital Gains Tax
Social Security & Payroll
🇱🇻 Latvia — Municipal Income Tax
Latvia's 119 municipalities levy a local income tax portion — 80% of income tax goes to municipalities, 20% to the state. The effective split means municipalities directly benefit from local earnings. Property tax (nekustamā īpašuma 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.
🇮🇸 Iceland — 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.
Latvia vs Iceland: Key Tax Differences (2026)
💰 Income Tax: 🇮🇸 Iceland has a higher top income tax rate (20–31% vs ~36.94%). 🇱🇻 Latvia is more favourable for high earners.
🛒 VAT/Sales Tax: Iceland has a higher consumption tax (12–21% vs 11–24%).
🏢 Corporate Tax: Corporate rates are similar in both countries (20% vs 20%).
📈 Capital Gains: 🇱🇻 Latvia taxes investment gains at a lower rate (20% vs 22%), benefiting investors.