Pensions for Non-Residents Will Be Recalculated: What Needs to Be Done Urgently 0 36

What Has Changed and Why Is It Important?

The tax-exempt minimum of 500 euros was applied to the pensions of most non-residents, from which tax was withheld. However, starting from April 1, the procedure for tax deduction and the application of benefits will change for some pensioners.

The State Social Insurance Agency (VSAA) appeals to pension recipients who are officially recognized as tax non-residents of Latvia. In order for the agency to correctly calculate the tax, pensioners must CONFIRM their tax residency (the country where they live and pay taxes).

If the VSAA does not have the documents or they have expired, tax may be withheld from the ENTIRE amount of the pension without considering the tax-exempt minimum.

If a senior lives in the EU or EEA (European Economic Area), that is one situation. But if, for example, they live in Russia, that is quite another.

Below, we provide the VSAA's answers to the main questions regarding these April changes.

When Is Tax Not Withheld from the Pension?

Income tax in Latvia will not be deducted from your pension if:

• you have submitted documents to the VSAA confirming your tax residency

• there is an agreement between Latvia and your country of residence stating that tax should be paid only in the country of residence.

In What Cases Will Tax Be Withheld from the Entire Amount of the Pension?

Latvia will withhold tax from the entire amount (without applying the tax-exempt minimum) if:

• the VSAA has no information about your country of residence (you have not submitted documents)

• the validity of previously submitted documents has expired (depending on the amount of the pension, they are valid for 12 months or 5 years)

• you live in a country that is not part of the EU/EEA, and according to the agreement/convention with Latvia, the country paying the pension (Latvia) must withhold tax, as the tax-exempt minimum does not apply to these pensions.

Special Conditions for Residents of EU and EEA Countries?

If you live in an EU or EEA country and the tax must be paid specifically in Latvia, you will be treated more leniently: tax is withheld only from the amount that exceeds 500 euros.

What Needs to Be Done to Obtain the Benefit?

To confirm your status, you must submit a special form to the VSAA — a resident certificate application (according to Cabinet of Ministers Regulations No. 178).

The algorithm of actions proposed by the VSAA is as follows:

• fill out the residency confirmation form

• confirm it with the tax authority of your country or with the State Revenue Service of Latvia (SRS, VID)

• send the certified document to the VSAA.

How to Know If I Am a Tax Non-Resident of Latvia?

This status is determined by the State Revenue Service (VID). You need to contact them for clarification.

Does the Amount of the Pension Affect the Procedure for Confirming the Country of Residence?

The procedure is defined by the Cabinet of Ministers Regulations No. 178. The package of documents depends on the amount of the pension:

• if the pension is up to 5000 euros per year: it is sufficient to submit a residency certificate from the country where you live annually.

• if the pension is more than 5000 euros per year: you need to submit the Latvian form "Resident Certificate Application" (Rezidenta apliecība – iesniegums) along with a certificate from the tax authority of your country.

Is It Enough to Just Send the Completed Form to the VSAA?

The VSAA will accept the documents, but in most cases, they will forward them for verification to the State Revenue Service of Latvia. Only after confirmation from the tax authority will the benefit be applied.

If the pension is less than 5000 euros per year, the VSAA may make a decision independently based on your foreign certificate.

How to Submit Documents Without Coming to Latvia?

You can send documents signed with a secure electronic signature.

Remember that for documents from some countries, legalization or Apostille may be required.

What Should Those Who Are Just About to Apply for a Pension in the Fall Do?

If you live in the EU/EEA, Switzerland, the UK, or countries with which Latvia has a social security agreement, submit a pension request through the local social insurance office in your country. In this case, your request will automatically be considered confirmation of tax residency.

Will Certificates Submitted Through Foreign Authorities Before April 1 Remain Valid?

Yes. For tax non-residents, such confirmations obtained through competent authorities of other countries remain valid.

Where to Address Questions?

Consultation at the VSAA can be obtained:

• Write to the email: konsultacijas@vsaa.gov.lv

• Call the phone: +371 64507020.

Two Groups of Countries and Russia

Below is the distribution of countries into two groups based on international tax conventions with Latvia. This determines which country has the right to withhold income tax from your Latvian old-age pension. (Data from SRS).

• Group 1: Tax is Paid in the Country of Residence

If you reside in one of these countries and have submitted documents to the VSAA on time, tax will not be withheld in Latvia. Tax is paid in your current country of residence according to local legislation.

Austria, Azerbaijan, Armenia, Belarus, Hungary, Greece, Georgia, Ireland, Italy, Kazakhstan, Kyrgyzstan, USA, France, Croatia, Sweden, Estonia, South Korea, Japan.

• Group 2: Tax is Paid in the Country Paying the Pension (Latvia)

If you reside in one of these countries, tax is withheld by Latvia. The withholding procedure depends on whether the country is in the EU/EEA (whether the 500 euro benefit applies).

Albania, Belgium, Bulgaria, United Kingdom, Vietnam, Germany, Hong Kong, Denmark, Israel, India, Iceland, Spain, Canada, Qatar, Cyprus, China, Kosovo, Kuwait, Lithuania, Luxembourg, Macedonia, Malta, Morocco, Mexico, Moldova, Netherlands, Norway, UAE, Poland, Portugal, Romania, Saudi Arabia, Serbia, Singapore, Slovakia, Slovenia, Tajikistan, Turkmenistan, Turkey, Uzbekistan, Ukraine, Finland, Czech Republic, Montenegro, Switzerland.

• Regarding the Russian Federation

The agreement has been suspended since May 16, 2022, in accordance with the amendments of May 12, 2022, to the Law "On the Agreement between the Government of the Republic of Latvia and the Government of the Russian Federation on the Prevention of Double Taxation and Evasion of Tax Payments Regarding Income and Capital Taxes and the Protocol thereto" from the Latvian side.

According to official information from Latvia, the agreement is considered terminated (denounced) as of January 1, 2024. This means that tax benefits under this agreement will no longer apply.

This is certainly something to consider for seniors who plan to officially change their country of residence.

About the Automatic Recalculation of Pensions

Starting from April 1, 2026, Latvia will introduce an automatic recalculation of pensions (for age, disability, length of service) for working pensioners, provided that social contributions have been made for them.

No applications need to be submitted anymore - the recalculation will occur automatically from April 1 - seniors will be able to receive the increased amount already in April.

As we have previously reported, working pensioners could choose another month for the automatic recalculation by submitting an application to the VSAA by January 31, 2026.

What should those who did not submit such an application do but still want to change the recalculation date? As the VSAA indicates, in the future, it will be possible to submit an application to change the pension recalculation date, but no later than two months before the date of the next automatic pension recalculation.

Until March 31, 2026, the old pension recalculation procedure remains: based on the received application - a new recalculation is possible no earlier than 12 months after the previous recalculation.

The VSAA also notes: from April 1, 2026, there will be an automatic recalculation of old-age pensions, disability pensions of groups 1 and 2, as well as pension pensions (excluding institutional pensions) for those recipients who continued to work after receiving the pension or after the preliminary recalculation and:

• at least 12 months have passed since the payment of the pension or the previous recalculation

• during this period, social insurance contributions have been paid for at least one month.