November 28, 2014

In response to the numerous inquiries that we receive from our clients regarding tax consequences of Latvian dual citizenship we hereby provide explanation as follows.

Latvia is not on the list of countries, which tax foreign income of their non-resident citizens. Therefore, whether or not your worldwide income will be taxed in Latvia depends mainly on your Latvian residency status for tax purposes. A person is normally considered a Latvian resident for tax purposes if said person is habitually resident in the Republic of Latvia or said person resides in Latvia 183 days or longer within any 12 months' period commencing or ending in a fiscal year concerned.

If, however, you are considered a Latvian resident for tax purposes, this doesn't necessarily mean that your worldwide income will be taxed in Latvia. It depends on the type of income and the country where such income is gained. Latvia will not tax income derived by Latvian residents in respect of paid employment in any European Union member-state or in a country, which has entered into a double taxation treaty with Latvia.