Free tools · 2026 rates
Dividend and corporate income tax calculator 2026
From 2026 a company (SIA) can choose: standard corporate income tax (CIT) of 20% (dividends to individuals are not further taxed) or the alternative regime — CIT of 15% with a 6% personal income tax withholding. The calculator shows both side by side.
In Latvia corporate income tax is paid only when profit is distributed — reinvested profit is not taxed. The comparison shows how much of the money the company spends reaches the owner in each regime.
Best regime
Standard CIT 20 %
The owner receives 8 000,00 €
Difference between regimes
10,00 €
For the same money spent by the company the difference is small — the conditions decide
Standard CIT 20 %
8 000,00 €
the owner receives
- Company spends in total10 000,00 €
- Declared dividend8 000,00 €
- CIT2 000,00 €
- Income-tax withholding0,00 €
- Total taxes2 000,00 € (20 %)
Dividends to individuals are not further taxed with personal income tax. Available to all — even if a member is a legal entity.
Alternative 15 % + 6 % income tax · New from 2026
7 990,00 €
the owner receives
- Company spends in total10 000,00 €
- Declared dividend8 500,00 €
- CIT1 500,00 €
- Income-tax withholding510,00 €
- Total taxes2 010,00 € (20,1 %)
Only if all members are individuals; the choice applies to all dividends of the tax period.
In both regimes the result per each €100 of profit is almost the same (€80.00 vs €79.90) — in practice the choice is set by the conditions: the alternative regime requires all members to be individuals and binds all of the year's dividends. Remember also the minimum corporate income tax of 50,00 € a year, if the company does not pay at least €100 of payroll taxes.
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How it is calculated — examples and rates
How tax on dividends is calculated in 2026
The figures on this page are computed by the Vadi tax engine using the rates in force on 1 October 2026. The calculation is for information only and does not replace tax advice.
In Latvia corporate income tax (CIT, in Latvian UIN) is paid not on profit earned but on profit distributed — at the moment a company (SIA) calculates dividends. As long as the profit stays in the company, there is no tax.
Standard regime: CIT of 20%
The dividend is divided by the coefficient 0.80 and multiplied by 20%. That equals 25% of the dividend paid out. Individuals pay no further personal income tax (IIN) on such dividends, and the regime is available to every company.
Alternative regime: CIT of 15% and income tax of 6%
The dividend is divided by the coefficient 0.85 and multiplied by 15%, and the company withholds 6% IIN from the dividend itself. The regime has been in force since 1 January 2026. It can be chosen only if all members of the company are individuals, and the choice applies to all dividends of that taxation period.
The CIT declaration is filed by the 20th of the month following the taxation period and the tax is paid by the 23rd. For dividends calculated in October 2026 that means 20 November 2026 and 23 November 2026. The declaration for the last month of the year must always be filed — even if no profit was distributed.
If the CIT calculated during the year is less than €50, the difference must be paid. The minimum tax does not apply if the company was registered in the reporting year, its liquidation has been completed, insolvency proceedings have started, or payroll taxes for employees were paid during the year in the amount set by law.
Dividends are not the only way for an owner to take money out of a company: a salary can be worked out in the salary calculator, and a company can be compared with other regimes in the regime comparison. How Vadi prepares the CIT declaration is described in the handbook section “Taxes and declarations”.
Dividend calculation examples in both regimes
Distributable profit of €10,000
| Item | Standard CIT 20% | Alternative 15% + 6% |
|---|---|---|
| Distributable profit before CIT | €10,000.00 | €10,000.00 |
| Declared dividend | €8,000.00 | €8,500.00 |
| Corporate income tax | €2,000.00 | €1,500.00 |
| Income tax withheld | €0.00 | €510.00 |
| Total taxes | €2,000.00 | €2,010.00 |
| Company spends in total | €10,000.00 | €10,000.00 |
| The owner receives | €8,000.00 | €7,990.00 |
From the same profit the owner receives €8,000.00 under the standard regime and €7,990.00 under the alternative one. The difference is €10.00, so in practice the choice is decided by the conditions, not the amount.
Desired dividend of €1,000
| Item | Standard CIT 20% | Alternative 15% + 6% |
|---|---|---|
| Desired dividend | €1,000.00 | €1,000.00 |
| Declared dividend | €1,000.00 | €1,000.00 |
| Corporate income tax | €250.00 | €176.47 |
| Income tax withheld | €0.00 | €60.00 |
| Total taxes | €250.00 | €236.47 |
| Company spends in total | €1,250.00 | €1,176.47 |
| The owner receives | €1,000.00 | €940.00 |
If you know the dividend rather than the profit: under the alternative regime the company spends less (€1,176.47 versus €1,250.00), but after the income tax withholding the owner receives €940.00 instead of €1,000.00.
How much of the profit the owner receives: the most searched amounts
It is assumed that the whole of the stated profit is paid out as dividends.
| Distributable profit | CIT (standard) | Owner receives (standard) | CIT + income tax (alternative) | Owner receives (alternative) |
|---|---|---|---|---|
| €1,000.00 | €200.00 | €800.00 | €201.00 | €799.00 |
| €5,000.00 | €1,000.00 | €4,000.00 | €1,005.00 | €3,995.00 |
| €10,000.00 | €2,000.00 | €8,000.00 | €2,010.00 | €7,990.00 |
| €20,000.00 | €4,000.00 | €16,000.00 | €4,020.00 | €15,980.00 |
| €50,000.00 | €10,000.00 | €40,000.00 | €10,050.00 | €39,950.00 |
| €100,000.00 | €20,000.00 | €80,000.00 | €20,100.00 | €79,900.00 |
Sources: Corporate Income Tax Law; Law on Personal Income Tax.
Frequently asked questions
How much tax is due on dividends in 2026?
Under the standard regime, corporate income tax is 20% of the gross distributable profit (dividend / 0.8 × 20% — effectively 25% of the amount paid out); there is no further personal income tax on dividends for individuals. From €100 of profit the owner receives €80.
What is the alternative CIT regime (15% + 6%)?
From 2026, a company (SIA) whose members are all individuals can apply corporate income tax of 15% to dividends (coefficient 0.85) while withholding 6% personal income tax. The choice applies to all dividends of the tax period. From €100 of profit the owner receives about €79.90 — almost the same as under the standard regime.
Is reinvested profit taxed with corporate income tax?
No — in Latvia corporate income tax is paid only when profit is distributed. As long as the profit stays in the company or is reinvested, there is no tax.
How much tax is due when paying out €1,000 in dividends?
Under the standard regime CIT is €250.00 and the owner receives the full €1,000.00. Under the alternative regime CIT is €176.47, €60.00 of income tax is withheld from the dividend, and the owner receives €940.00.
Does an individual pay personal income tax on dividends?
Under the standard regime — no: if the company has paid CIT on the dividends, the individual pays no further income tax. Under the alternative regime the company withholds 6% income tax from the dividend and pays it to the state.
When is the CIT declaration filed and the tax on dividends paid?
The declaration is filed by the 20th of the month following the month in which the dividends were calculated, and the tax is paid by the 23rd. The declaration for the last month of the year is always filed — even if no dividends were calculated.
What is the minimum CIT?
If the CIT calculated during the year is less than €50, the difference is paid with the declaration for the last month of the year. It does not apply if the company was registered in the reporting year, its liquidation has been completed, insolvency proceedings have started, or payroll taxes for employees were paid in the amount set by law.
Can the alternative CIT regime be used if a member of the company is another company?
No. The alternative regime can be chosen only if, in the taxation period in which the dividends are calculated, all members of the company are individuals. If a legal entity is among the members, the standard regime remains.
This calculator is for information only and does not replace tax advice — the final figure is set by the State Revenue Service (VID) in its assessment. The rates are computed by the same engine used in Vadi accounting, and each value is verified against official sources (VID, likumi.lv). If you spot an inaccuracy, write to us.