🇱🇻 COUNTRY A Latvia VS 🇱🇹 COUNTRY B Lithuania

Latvia and Lithuania are Baltic neighbors with similar progressive tax systems but different approaches. Latvia uses a two-tier system: 25.5% up to €105,300 of annual income, then 33% above. Lithuania's 2026 rates are three tiers: 20% up to about €83,237 (36 times the average monthly wage), 25% up to about €138,729, 32% above, plus 19.5% employee Sodra and health contributions. Lithuania's figures here are income tax plus employee social contributions for a single resident employee on wages; the Latvia figures (income tax plus 10.5% employee social insurance) are computed the same way. At €50,000: Latvia charges ~€14,978 (30.0%), Lithuania charges about €19,750 (39.5%). On these figures Latvia is cheaper by about €4,772/year at this level, because Lithuania's employee contributions outweigh its lower headline rate. Latvia has generous pensioner allowances (€6,600/year exempt) making it attractive for retirees. Both countries have similar costs of living, with Riga slightly larger than Vilnius. Choose Latvia if: you want the lower personal tax on these figures, you're a retiree (better allowances), prefer Riga's Art Nouveau architecture, or work in logistics/shipping. Choose Lithuania if: you work in fintech/tech (stronger ecosystem) or prefer Vilnius lifestyle, accepting the higher tax.