New procedure for calculating Latvian pensions

From April 1, pensioners receiving pensions who are officially recognized as tax NON-residents of Latvia must CONFIRM their tax residency (the country where they live and pay taxes) so that the agency can calculate the tax correctly.

If the SASS has no documents on file or their validity has expired, tax may be withheld from the ENTIRE pension amount without taking the tax-free allowance into account.
If a senior lives in the EU or EEA (European Economic Area), that is one situation. If they live in Russia, it is quite another.

Latvian income tax will not be deducted from your pension if:
you have submitted documents to the SASS confirming your tax residency
Latvia and your country of residence have concluded an agreement under which tax is payable only in the country of residence.

Below are the SASS's answers to the main questions regarding the new rules.

When is tax NOT withheld from a pension?

Latvian income tax will not be deducted from your pension if:
you have submitted documents to the SASS confirming your tax residency
Latvia and your country of residence have concluded an agreement under which tax is payable only in the country of residence.

In what cases will tax be withheld from the entire pension amount?
Latvia will withhold tax from the entire amount (without applying the tax-free allowance) 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 outside the EU/EEA, and under an agreement/convention with Latvia, tax must be withheld by the country paying the pension (Latvia), since the pensioner's tax-free allowance does not apply to these pensions.

Special conditions for residents of EU and EEA countries?

If you live in a European Union or European Economic Area (EEA) country and tax is payable specifically in Latvia, you will be treated more leniently: tax is withheld only on the amount exceeding 500 euros.

What do you need to do to receive the tax relief?

To have your status recorded, you must submit a special form to the VSAA—a certificate-declaration of residence (under Cabinet of Ministers Regulation No. 178).
The SASS recommends the following steps:
• fill in the certificate of residence form
• have it certified by the tax authority in your country or by the State Revenue Service of Latvia (SRS, VID)
• send the certified document to the SASS.

How do I know whether 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 procedure for confirming your country of residence depend on the amount of your pension?

The procedure is set out in Cabinet of Ministers Regulation No. 178. The required documents depend on the amount of the pension:
if your pension is up to 5000 euros per year: it is sufficient to submit a certificate of residence in the format used in the country where you live each year.
if your pension is more than 5000 euros per year: you must submit the Latvian form “Certificate-Declaration of Residence” (Rezidenta apliecība – iesniegums) together with a certificate from your country's tax authority.

Is it enough simply to send the completed form to the SASS?

The SASS will accept the documents, but in most cases will forward them to the State Revenue Service of Latvia for verification. The tax relief will be applied only after confirmation from the tax authority.
If the pension is less than 5000 euros per year, the VSAA may make the decision independently on the basis of your foreign certificate.

Where can I direct questions?

You can get advice from the SASS:
Write to the email address: 
konsultacijas@vsaa.gov.lv
Call: +371 64507020

More detailed information at the link