Eligible expenditure for education and therapeutic services

Eligible expenditure for education and therapeutic services
From the amount of annual taxable income expenditure for the raising of qualifications,
acquisition of a speciality, acquisition of an education, for the use of health and therapeutic
services and health insurance payments to insurance companies established and operated
in accordance with the Law on Insurance Companies and Supervision Thereof by the payer
and family members thereof (of both whose country of residence is the Republic of Latvia
and whose country of residence is another Member State of the European Union or
European Economic Area state) shall be deducted. The composition and rates of the
expenditures referred to are established in Cabinet Regulation No. 336 of 31 July 2001
“Regulations Regarding Eligible Expenditure for Education and Therapeutic Services”.
Eligible expenditure for education and the use of therapeutic services shall be deducted
from the amount of annual taxable income by means of a declaration. This means that a
natural person who wants to apply for a deductible expenditure must complete the annual
income declaration.
The total amount of the expenditure to be included in eligible expenditure for education
and therapeutic services of a natural person who is a personal income tax payer shall not
exceed LVL 150 (EUR 213,43 in 2014) for the taxpayer and each of his or her family
members for the taxation year.
Example: If the taxpayer has paid during the taxation year LVL 400 for higher education
studies and has acquired a health card for LVL 50, then LVL 150 shall be included in his or
her eligible expenditure for the taxation year.
A natural person who is a personal income tax payer may reduce his or her taxable income
for his or her own and his or her family members’ eligible expenditure for education and
therapeutic services. The following shall be considered to be the family members of a
natural person:










the natural person’s parents;
the natural person’s grandparents;
the natural person’s children;
the natural person’s grandchildren;
the natural person’s spouse;
a child taken by the natural person for raising, if it is impossible to recover the
allowance (alimony) from the parents of the child, including the period while he or
she continues the acquisition of a general, professional, higher or special
education, but not longer than until reaching 24 years of age;
a minor brother and sister, as well as for a brother and sister of the natural
person, while brother and sister continue the acquisition of general, vocational,
higher or special education, but not longer than until reaching 24 years of age if
they do not have parents who are able to work;
dependents of the natural person’s dependent persons;
a person for the benefit of whom allowance (alimony) is recovered from the payer
following a court judgment;
a person under guardianship or trusteeship of the payer.
The eligible expenditure of each person may be deducted from the taxable income only
once, without exceeding the maximum ceiling of LVL 150 (EUR 213,43 in 2014). This
means that, for a person who is not a taxpayer, if an amount of LVL 600 has been paid for
higher education during the taxation year, then LVL 150 shall be included in the eligible
expenditure for the taxation year for only one of his or her family members.
The following eligible expenditure for education may be deducted from the taxable income:

expenditure for the acquisition of higher education and all levels of vocational
education in State accredited education institutions of the Republic of Latvia, as



well as in education institutions of the European Union Member States and
European Economic Area States, or upon acquiring State accredited education
programmes (including also expenditure for training in preparatory divisions);
expenditure for the acquisition of a speciality in State accredited education
institutions of the Republic of Latvia, as well as in education institutions of the
European Union Member States and European Economic Area States, or upon
acquiring State accredited education programmes;
expenditure for in-house training and acquisition and improvement of the skills
necessary in an occupation, profession or trade, as well as for enhancing of
knowledge;
expenditure for increasing the level of occupational preparedness.
Education expenditure for education shall not include the share of the tuition fee for the
costs of transport to and from the place study, housing rental and public utility services
used therein, as well as catering costs during studies. Eligible expenditure shall not include
expenditure for acquisition of higher education and all levels of vocational education in
education institutions of other foreign countries (except European Union Member States
and European Economic Area States).
The following eligible expenditure for therapeutic services may be deducted from the
taxable income:


expenditure for the use of health and therapeutic services;
health insurance payments pursuant to a health insurance contract (without
savings of funds) to insurance companies established and operated in accordance
with the Law on Insurance Companies and Supervision Thereof.
Expenditure for the use of health and therapeutic services may include:




expenditure for health care services not covered by sickness funds;
patient fees paid;
expenditure related to treatment in rehabilitation institutions;
expenditure for the manufacture and acquisition of endoprostheses and other
types prostheses connected to the human body, if these have not been paid for
from the sickness fund or other persons’ funds.
Expenditure for the use of health and therapeutic services may not include:


expenditure for optical products (glasses and contact lenses) for vision correction;
expenditure for medical treatment (medical preparations, medicines and vitamins),
medical devices and products, except for the medical treatment, medical devices
and products used for the provision of health care services themselves, which are
not covered by sickness funds.
Example: Eligible expenditure for therapeutic services may include expenditure for
vaccination, which include also expenditure for acquisition of disposable syringes and
vaccines.
The limitation of eligible expenditure for the taxation year (LVL 150) (EUR 213,43 in 2014)
shall not apply to the following:


expenditure for planned surgery;
dental services (including prosthetics).
In the taxation year this expenditure is to be deducted from the payer’s taxable income in
full.
Example: If the taxpayer has paid in the taxation year LVL 600 for a planned surgery,
then the whole amount is to be included in the eligible expenditure for the taxation year.
If the total amount of expenditure for education and therapeutic services, except
expenditure for planned surgery and dental services, for the taxation year exceed LVL 150
(EUR 213,43 in 2014) for the taxpayer or his or her family members, the taxpayer may
carry the excess amount over to the taxable income for the next period of five taxation
years in chronological order.
Example: If the taxpayer has paid during the taxation year LVL 400 for higher education
studies and has acquired a health card for LVL 50, then LVL 150 shall be included in his or
her eligible expenditure for the taxable year, and LVL 300 shall be carried over to the next
taxation years.
Expenditure for education and therapeutic services, except expenditure for planned
surgery and dental services, is also to be carried over to the next five taxation years if the
natural person has had no taxable income during the taxation year.
If the taxpayer has paid during the taxation year for a planned surgery or dental services
an amount which, after deducting the other amounts to be paid by the payer pursuant to
laws, exceeds the outstanding amount of the taxpayer’s taxable income, then the amount
not included in the eligible expenditure during the taxation year shall not be deducted from
the taxable income for the next taxation years.
The taxpayer’s expenditure for planned surgery or dental services which, after deducting
the other amounts to be paid by the payer pursuant to laws, exceeds the outstanding
amount of the taxpayer’s taxable income, may be distributed between the taxpayer’s
family members who are entitled to eligible expenditure in connection with the taxpayer,
and, as regards the taxpayer's family member, the excess amount of this expenditure may
be distributed between the taxpayer and other persons entitled to eligible expenditure in
connection with the taxpayer’s family member.

Download Report