New Procedure for Calculating Late Payment Interest Effective from 2026

As of 1 January 2026, significant amendments to the Law on Taxes and Duties will enter into force, introducing changes to the calculation and application of late payment interest. Going forward, late payment interest will be calculated twice a month – on the 1st and 15th day of each month, instead of daily as is currently the case. These changes will affect all taxpayers making payments into the single tax account, aiming to improve transparency in tax administration and simplify payment control processes.

In the article “Changes in the Calculation of Late Payment Interest”, Anita Rudzīte, Project Manager of Business Process and Accounting Outsourcing at BDO Latvia, explains the essence of the new procedure, its impact on corporate financial planning, and provides practical examples and recommendations on how companies can prepare for the upcoming changes before the start of 2026.

“The changes provide that late payment interest will be calculated twice a month – on the 1st and 15th day of each month.”
– Anita Rudzīte, Project Manager of Business Process and Accounting Outsourcing, AS “BDO Latvia”

The amendments will be particularly relevant for companies that handle a large number of tax transactions or operate across multiple tax categories, as the new procedure will change how interest accrues and affect cash flow management.

The full article is published in iFiT magazine, November 2025 issue (No. 11), pages 18–19.