Preparation of Annual Personal Income Tax Returns – Professional Support for Residents and Non‑Residents

The preparation of an annual personal income tax return may appear to be a routine compliance obligation; however, in practice it often involves complex issues, particularly where income is earned in multiple jurisdictions, tax residency status has changed, or specific tax reliefs apply. KPMG’s tax team provides comprehensive support to both Latvian residents and non‑residents, ensuring accurate, timely and fully compliant preparation of annual personal income tax returns.

What does KPMG’s annual tax return service include?

Our service covers the entire tax return preparation process – from the initial assessment of the individual’s tax position to the submission of the return to the State Revenue Service (SRS). Depending on the client’s circumstances, we:

- assess the individual’s tax residency status and its impact on taxation;

- identify taxable income earned in Latvia and abroad;

- analyse applicable tax reliefs, non‑taxable income and deductible expenses;

- calculate the payable or refundable personal income tax;

- prepare and submit the annual personal income tax return to the SRS;

- advise on tax payment deadlines and potential tax risks;

- represent the client in communication with the SRS, where required.

Our objective is not only to ensure technical accuracy, but also to mitigate tax risks and optimise the client’s tax position within the framework of applicable legislation.

Common situations where assistance is required for Latvian tax residents

Professional assistance with the preparation of an annual tax return is often required for Latvian tax residents in the following situations:

- income earned abroad (salary, dividends, interest, royalties, etc.);

- remote work for a foreign employer;

- income from self‑employment or business activities;

- transactions involving real estate or securities;

- capital gains income;

- application of tax reliefs or deductible expenses;

- changes in tax residency status during the year.

Even minor errors in such cases may have significant tax consequences, making professional support particularly important.

Common situations where assistance is required for non‑residents

For non‑residents, the Latvian tax system can be difficult to navigate, and assistance is often required where:

- income is earned in Latvia (e.g. employment income, management board remuneration, royalties);

- real estate in Latvia is owned or sold;

- income is derived from capital or investments in Latvia;

- double taxation treaties need to be applied;

- a tax return must be filed to reclaim overpaid tax;

- relocation to or from Latvia has taken place.

In such cases, KPMG helps ensure that tax returns are prepared correctly, taking into account both Latvian tax legislation and international tax principles.

Preparation of Capital Gains Tax Returns

In addition to annual personal income tax returns, KPMG also provides support with the preparation of capital gains tax returns, which often raise practical and technical questions for both residents and non‑residents.

We assist clients in situations where they have:

- sold real estate in Latvia or abroad;

- disposed of securities, shares, investment funds or other financial instruments;

- carried out transactions involving crypto‑assets;

- a need to determine the acquisition value of a capital asset and correctly calculate capital gains;

- questions regarding applicable tax treatment, reporting obligations and filing deadlines.

KPMG ensures accurate calculation of capital gains, prepares and submits capital gains tax returns to the SRS, and advises on tax payment deadlines and potential risks, helping clients avoid errors and ensure full compliance with Latvian tax regulations.