How are social tax discounts for dependents applied in Latvia?

In Latvia, employees who have dependents, such as children, may be eligible for personal income tax reliefs. These are commonly referred to as tax discounts.

According to Latvian tax law, such discounts can only be applied through one employer, even if the employee holds multiple jobs.


How the Process Works

To receive the tax discount, you must designate a single employer to apply the relief. This is done through the State Revenue Service (Valsts ieņēmumu dienests, VID) using their Electronic Declaration System (EDS). Once the designation is registered and approved in the EDS, VID issues an official confirmation to the selected employer.


The designated employer is then legally authorized to apply the personal income tax discount for dependents through payroll.


When You Choose Horizon as Your Main Employer

If you select Horizon as your primary employer for applying the tax discount, we will:

  • Receive confirmation from VID via the EDS system once your designation is processed.

  • Apply the appropriate dependent-related tax discount directly to your monthly salary, as required by Latvian tax regulations.

  • Reflect the discount in your payslips, ensuring transparency and compliance with your declared tax relief status.

  • Monitor VID updates to remain in alignment with any changes to your declared dependents or discount eligibility.

  • Assist you with general guidance on where and how to make the necessary declarations in VID EDS (Horizons cannot make declarations on your behalf).


Please ensure that Horizon is selected as the designated employer within the VID EDS system. Without official confirmation from VID, we are not legally permitted to apply any tax discounts, regardless of your dependent status.


When Another Employer or Your Own Company is Selected

If you choose to register your dependents under a different employer, or under your own company, where you are a shareholder or board member and maintain an active employment status, that entity becomes the one responsible for applying the tax discount.


In such cases:

  • Horizon will not receive any confirmation from VID.

  • We are therefore unable to apply any dependent-related tax discounts.

  • Your salary from Horizon will be taxed at the full applicable rate, without any personal income tax relief for dependents.


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