Business Trip Daily Allowances in Latvia (2026 Rates)

Sending an employee on a two-day business trip to Tallinn seems straightforward until the payroll department asks: what is the daily allowance, is it taxable, and where does it appear on the report? The answers -- governed by Cabinet Regulation No. 969 -- determine whether the expense is a clean tax-free reimbursement or an inadvertent salary supplement that triggers VSAOI and IIN.

Daily Allowance Rates

Latvia sets maximum tax-free daily allowances (dienas nauda) for business trips based on destination:

Domestic trips (within Latvia):

• Up to EUR 30 per day (tax-free if within this limit)

International trips:

• Rates vary by country, set by Cabinet Regulation
• EU destinations typically range from EUR 50-75 per day
• Higher-cost countries (Norway, Switzerland, Japan) may have rates up to EUR 80-100 per day

These are maximum tax-free limits. Employers may pay less. Employers may also pay more, but any amount exceeding the regulation's cap is treated as taxable income -- subject to IIN (25.5%) and VSAOI (34.09% total).

Example: An employer sends an employee to Germany for 3 days and pays EUR 80/day as daily allowance. If the regulation sets the German rate at EUR 66:

• Tax-free portion: EUR 66 x 3 = EUR 198
• Taxable excess: (EUR 80 - EUR 66) x 3 = EUR 42
• The EUR 42 must be added to the employee's taxable income for that month

(In our practice, we recommend employers stick exactly to the regulated rates. The administrative burden of splitting allowances into tax-free and taxable portions rarely justifies the few extra euros.)

What Qualifies as a Business Trip

Not every work-related journey is a "komandējums" (business trip) in the legal sense. To qualify:

• The trip must be to a location outside the employee's regular workplace
• The employer must issue a written business trip order specifying destination, purpose, and duration
• The trip must last at least one day (day trips to another city do not automatically qualify)

Employees whose employment contract specifies "various locations" as their workplace (common for sales, logistics, or construction) may not qualify for business trip allowances for routine travel to those locations. The distinction matters for tax treatment.

Documentation Requirements

For the daily allowance to be tax-free, the employer must maintain:

1. Business trip order (signed by authorized person)
2. Travel tickets, boarding passes, or fuel receipts
3. Hotel invoices (if accommodation is reimbursed separately)
4. A brief trip report from the employee

Without proper documentation, VID may reclassify the allowance as taxable income during an audit -- retroactively, with interest and penalties.

Accommodation and Transport: Separate from Daily Allowance

Daily allowance covers food and incidental expenses. Accommodation and transport are reimbursed separately based on actual documented costs:

• Hotels: Actual cost with invoice (no per-night cap in regulation, but reasonableness applies)
• Transport: Economy class air/rail, or mileage reimbursement at EUR 0.10/km for personal vehicle use
• Local transport: Actual costs with receipts

The daily allowance is reduced by 30% if the accommodation includes breakfast. This detail is frequently overlooked.

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Business Trip Payroll Without the Paperwork Burden

CORVUS ACCOUNTING & TAX processes business trip allowances as part of monthly payroll, ensuring correct rates, proper documentation, and compliant tax treatment for every trip.

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