#WallessTaxCookies | Latvia’s thin-cap rules ease from 2026 – will your interest payments still trigger extra CIT?
2025 12 18
From 1 January 2026, Latvia expands CIT thin-cap relief: the 4:1 debt-to-equity adjustment on “increased interest payments” will not apply to interest on financing sourced via EU/EEA trading-venue securities, licensed crowdfunding providers, licensed investment brokers/credit institutions, EU/EEA securitization issuances, or EU/EEA alternative investment funds. PPP target companies (SPVs) also fall outside the rule.
A practical add-on: if one group company receives qualifying external financing, it may on-lend within the group at market terms without triggering the 4:1 adjustment.
Bottom line: cheaper and more flexible capital structures for Latvian groups.