Latvian Court Upholds Special Tax Regime for Consumer Credit Providers

On May 13, 2025, Latvia's Constitutional Court upheld the constitutionality of a special corporate income tax regime introduced in 2024 for consumer credit service providers. The regime imposes a 20% tax on the previous year's profits, regardless of profit distribution. The court found that the tax is based on objective and rational considerations, aiming to regulate the consumer credit market effectively. This ruling affirms the government's approach to taxation in the financial sector, ensuring compliance with constitutional principles.