In 2025, a number of changes to tax laws are adopted:
The same personal income non-taxable minimum for all wage earners – €510.
Personal income tax will have two rates. It will be 25.5% for incomes up to €8,775 per month and 33% for incomes above €8,775 per month. For the part of income above €200,000 per year, including wages, dividends, capital gains and non-capital gains, there will be an additional personal income tax of 3%.
The personal income tax minimum for pensioners has been increased from €500 to €1,000 per month.
Vehicle tax rates will increase by 10%. For the previous year, this must be paid by January 31.
The reduced VAT rate of 12% on fruit, berries, and vegetables is maintained
Excise duties will rise on tobacco and tobacco products, fuel and natural gas, sweetened and energy drinks, and intermediate alcoholic beverages.
A surplus tax or solidarity levy is introduced on banks.
The maximum amount of compulsory and voluntary contributions to State social insurance for the next three years (2025, 2026, 2027) is set at EUR 105 300 per year.
The special procedure for determining and paying compulsory State social insurance contributions for recipients of royalties is extended for three years.
Wages and pensions
The monthly minimum wage increases to €740 during normal working hours.
The threshold for the guaranteed minimum income for the first or only person in a household is increased to €166 (previously €137), and €116 (previously €96) for the rest of the household.
The income threshold for the first or only person in a low-income household has been increased to €377 (previously €343), and €264 (previously €240) for other persons in the household.
The income threshold for the first or only person in an impoverished household has been increased to €604 (previously €549), and €423 (previously €384) for the other persons in the household.
The minimum old-age pension is increased. The calculation base for the minimum old-age pension increases from €171 to €189 (25% of the median income), for people with disabilities from childhood from €206 to €226 (30% of the median income). The minimum old-age pension is determined by applying a coefficient of 1.2 to the calculation base and increasing the amount by 2% of the calculation base for each year of service exceeding 20 years.
The minimum disability pension is also increased.
For the next four years, 1% of the second pillar of the funded pension scheme will be transferred to the first pillar. Until now, contributions to the second pillar were 6% of earned income. The pension capital in the unfunded state pension scheme, or pension level 1, accounted for 14% of contributions. From 2025, the contributions will be 5% and 15% of the contribution object respectively.
From 2025, pensions will be indexed at a higher rate. In 2024, the indexable threshold was €683. On October 1 2025, the part of the pension indexed will be the full amount of the average insurance contribution salary of the previous calendar year. This is expected to be around €1,518.
From 2025, those who have reached the age of 65 are entitled to a state old-age pension if they have at least 20 years of insurance. Persons with at least 30 years of insurance have the right to early retirement. In 2025, early retirement is open to persons who have reached the age of 63.
Social benefits
State maintenance for children up to 7 years of age will rise to €125 per month, and for children up to 18 years of age and adults aged 18 to 21 years – to €150. The Maintenance Guarantee Fund will ensure the payment of maintenance to children if one or both parents fail to provide it.
The childcare allowance for a disabled child is increased by €100 from €313.43 to €413.43 per month.
Psychosocial rehabilitation services for children with autism spectrum disorders (ASD) and their family members will now be permanently funded by the state budget.
Tobacco products can be bought from the age of 20; flavorings are banned
The age limit for the purchase of tobacco products, tobacco substitutes, herbal smoking products, electronic smoking devices and refill tanks is raised to 20 years. The sale of e-cigarette liquids and tobacco substitute products with flavorings other than those that produce the smell or taste of tobacco is also banned from 2025.
The ban on flavorings applies to both disposable electronic cigarettes such as Salt, Coss, Crystal and refillable electronic cigarettes or vapes.
A ban on smoking in gambling venues has also been introduced.
Vehicle registration changes
As of July 2025, electric scooters will also need to have compulsory third party liability insurance (OCTA).
It is estimated that for electric scooters, the cost of an OCTA could be between €24 and €50 per year, similar to the current cost for mopeds.
To comply with a European Union (EU) directive, OCTA will also be required for vehicles which are not in circulation but whose registration has not been suspended.
The requirement was originally expected to come into force on December 10 2024, but was postponed to clarify the rules. It is expected to make it easier for owners to suspend the registration of vehicles temporarily.
As of January 1, 2025, only vehicles registered in third countries and declared in the e-services of the Road Safety Directorate will be allowed to participate in road traffic in Latvia. Any vehicle registered in a country other than the EU or European Economic Area (EEA) Member States or the Swiss Confederation will have to declare its use in Latvia before entering the territory of Latvia.
Prescription prices should fall
The price of prescription medicines over €5 should fall by 15 to 20 percent as of 2025, according to a new pricing model for medicines.
The cheapest prescription medicines could become slightly more expensive.
Pharmacists’ services will now cost €1.50 per prescription, of which the customer pays 75 cents and the state the same. In smaller pharmacies, the price of a prescription will be €2.50, while the patient will pay the same 75 cents and the state €1.50.
Passport and ID cards become more expensive
From January 1, 2025, the state fee for issuing a passport within 10 working days will be €44 (€34 until now) and within two working days €70 (€60 until now). The fee for issuing an identity card or eID card within 10 working days will be €25 (€15 until now) and €40 (€30) within two working days.
The reductions in fees for children and young people up to the age of 20, pensioners, and people with disabilities of group I or II will be maintained. For these groups, the fee for a standard document will rise by €5.
The fee for issuing a foreigner’s identity card will be €170 from 1 January 2025, while the fee for issuing a residence permit will be €45 within 10 working days and €80 within two working days.
New ballot papers
The municipal elections in June 2025 will have a new type of ballot paper. The new ballot papers will have two boxes opposite the candidate’s name, for and against, and will be colored green and red respectively.
The opening hours of polling stations have also been changed. Unlike in previous elections, polling stations will now be open for five days at fixed times during the election week, instead of three days as before. On the day of the municipal elections, polling stations will open at 8:00 instead of 700 as before and will remain open until the usual time of 20:00.
Increase in fines for serious speeding offences
Speeding between 61 and 70 km/h above the legal limit will be punishable by a fine of between €720 and €960 (currently between €360 and €480) and a ban on driving for nine months (currently six months).
Speeding between 60 and 70 km/h above the legal limit in a populated area will result in a fine of between €1040 and €1400 (currently between €540 and €680) and a driving ban of between nine and 12 months (currently a driving ban of 12 months).
Where the speed limit is exceeded by more than 70 kilometers per hour, a fine of between €1,400 and €2.000 will be imposed and the driving license will be suspended for between 12 and 36 months. This will apply to all vehicles, regardless of their gross vehicle weight.