Annual Income Declaration: What Should You Know?

Starting from March 1, taxpayers can submit their annual income declaration. For individuals, this is voluntary, but for those engaged in economic activity – the self-employed – it is mandatory in order to calculate and pay personal income tax. As March 1 approaches, we have compiled some of the most frequently asked questions from PATS.LV users regarding the preparation of the declaration.

In brief:

• The declaration is submitted via eds.vid.gov.lv from March 1 to June 1;
• Self-employed persons must fill in Annex D3 of the declaration;
• Personal income tax must be paid into the unified tax account by June 23;
• If annual income exceeds EUR 78,100, the declaration must be submitted between April 1 and July 1;
• Personal income tax must be paid by July 23;
• The tax can be paid in three instalments if it exceeds EUR 640.

Note! Self-employed persons must pay the minimum tax of EUR 50 by June 23, even if no income was earned in the previous year. The minimum tax is not payable:

• in the first year of business registration and the following year;
• in the year when the business activity is terminated.

Isn’t it enough to have submitted quarterly reports for the annual declaration?

It is important to maintain bookkeeping throughout the year and submit quarterly reports on time. However, quarterly reports alone are not enough to complete the annual income declaration. To fill out the declaration accurately and correctly, you must include all income and expenses related to economic activity, as well as provide information about tax reliefs.

Can the annual income declaration be created in the PATS.LV system?

The Pats.lv system is designed for recording income and expenses, automatic tax calculations, and preparation of quarterly reports. The annual income declaration must be submitted by filling out the official form on eds.vid.gov.lv. Some necessary data for the declaration can also be found on the es.pats.lv homepage.

• Select the relevant period: year 2024
• Data from the "Income" section in PATS.LV should be entered in line 5 of Annex D3
• Data from the "Expenses" line in PATS.LV should be entered in line 6 of Annex D3

Does PATS.LV know about my tax reliefs?

Tax reliefs are directly related to personal income tax calculation and the submission of the annual income declaration – they are used to determine the taxable income accurately. Please note that information on tax reliefs is only available to the State Revenue Service (VID) and will be applied automatically when calculating taxable income. PATS.LV does not have access to this data.

Can the personal income tax amount shown in PATS.LV differ from that on eds.vid.gov.lv?

Yes, it can – the personal income tax amount calculated by PATS.LV is indicative. It is based on the data you have entered into the system. However, we do not have access to your other income sources or any applicable tax reliefs. This information is available only to the State Revenue Service, so the tax amount shown in PATS.LV may differ from what you see on eds.vid.gov.lv.

For more information about the annual income declaration, visit:

• State Revenue Service website
• help.pats.lv
• PATS.LV blog section

Remember – to successfully submit your annual declaration, it is crucial to maintain accurate bookkeeping throughout the entire year! To make it easier, try PATS.LV – with automatic tax calculations, report generation, and other features to help manage your accounting faster and more accurately!