Company car tax

Tax exemptions

The company car tax exemptions:

• for a vehicle which is an emergency vehicle or is registered as an emergency vehicle;
• for vehicles owned or held by a person authorized by the vehicle manufacturer, which are used as demonstration vehicles and which have been declared in the register by the merchant or a branch of a foreign merchant;
• if the merchant or a branch of a foreign merchant provides car rental services or car rental services together with the sale of passenger cars make up not less than 90 per cent of the total turnover, for vehicles owned or held by him or her for short-term (up to one year) rental, which the merchant or the foreign branch of the merchant has declared in the register;
• for vehicles which the taxpayer uses exclusively for his or her economic activity and declared in the register;
• a taxpayer, if the taxpayer cultivates agricultural land owned, permanently used or leased and on 1 January of the current year has been approved for the receipt of a single area payment by the Rural Support Service, observing the following conditions:
  • where one passenger car is registered or owned by that taxpayer, the tax shall not be paid if the taxpayer’s income from agricultural production is at least EUR 5000 in the last annual company return or annual income tax return submitted (excluding aid received from the state and European Union for agriculture and rural development);
  • where one passenger car or more are registered or owned by that taxpayer, the tax shall not be paid if the taxpayer’s income from agricultural production is at least EUR 5000 in the last annual company return or annual income tax return submitted (excluding aid received from the state and European Union for agriculture and rural development) and for each subsequent passenger car, for each € 70 000 of income from agricultural production in the company's most recent annual report or income tax return (excluding aid received from the state and European Union for agriculture and rural development);
• the time when the vehicle has not been at the disposal of the taxpayer as a result of a criminal offense, which is confirmed by documents issued by the person conducting the proceedings or a foreign competent authority or information in the register regarding the vehicle;
• for the time when the vehicle has been seized in the cases provided for in regulatory enactments and its use in road traffic has been prohibited;
• for the time when the vehicle has been removed from the register for alienation in Latvia or for export from Latvia or the registration of the vehicle has been temporarily suspended by handing over the number plates;
• for a vehicle which has or is being registered the status of a historic vehicle;
• for a vehicle which is a sports vehicle or is registered as a sports vehicle;
• for the time when the vehicle registered in Latvia was exported from Latvia and was registered abroad;
• for a vehicle which the insolvency administrator of the owner of the vehicle removes from the register for alienation in Latvia or export from Latvia, or a vehicle the registration of which is temporarily suspended by handing over the number plates;
  • a merchant or a branch of a foreign merchant, or a farm for a vehicle of a natural person which is used on the basis of a lease agreement and for which that person, when paying the rent for the vehicle, withholds personal income tax in accordance with the Law on Personal Income Tax;
  • a merchant or a branch of a foreign merchant, or a farm for a vehicle which is used on the basis of a lease agreement entered into with a natural person registered with the State Revenue Service as an economic operator and independently calculates and pays personal income tax on rent for a vehicle in accordance with the procedures specified in the Law on Personal Income Tax.