The agreement governs the elimination of double taxation in cross-border matters. Prime Minister Brigitte Haas and Latvian Prime Minister Evika Siliņa signed a Double Taxation Agreement (DTA) between Liechtenstein and Latvia on Thursday, 2 October 2025, during the seventh meeting of the European Political Community (EPC) in Copenhagen.
The agreement regulates the elimination of double taxation in cross-border situations. It follows the OECD international standard and takes into account the results of the OECD/G20 BEPS Project (Base Erosion and Profit Shifting), which aims to prevent tax avoidance and tax evasion in cross-border contexts. At the same time, the agreement reflects the treaty practices of both Liechtenstein and Latvia.
Information exchange will be carried out according to international standards, while automatic information exchange will continue to be conducted under the AEOI Agreement between Liechtenstein and the EU. The agreement also includes provisions on mutual assistance in tax enforcement.
To promote cross-border investment, the DTA with Latvia provides that no withholding tax will be levied on dividends, interest, and royalties between legal entities. Furthermore, the DTA reduces withholding tax rates to 10% (for dividends and interest) and 5% (for royalties).
The DTA also regulates the treaty treatment of asset structures, pension funds, and non-profit organizations. In addition, transfer pricing issues may be discussed with the partner state within an institutionalized framework, and legal certainty is enhanced through the possibility of mutual agreement procedures.
The agreement represents another important step in expanding Liechtenstein’s network of double taxation treaties. It increases legal certainty for investors and strengthens economic and political cooperation between Liechtenstein and Latvia.
The government has already approved a report and motion to Parliament concerning the double taxation agreement (DTA) on income and wealth taxes with Latvia, which is expected to be discussed by the Landtag in its November session.
Source: www.finance.li
Aleksei Andrievskii is the founder of the ANDRIEVSKII SEA WEALTH family office in Cyprus, a member of the advisory board at Bendura Bank AG, Liechtenstein