Since 1 January 2025, Latvian employers can give staff up to €100 a year in gifts without triggering personal income tax, a big jump from the previous €15 threshold. But the rule is often misunderstood: it isn't tied to Christmas, a company anniversary, or any particular occasion, and the far stricter rules around client and business-partner gifts are a completely separate regime. Here's how the employee exemption actually works, twelve gift ideas that fit comfortably inside it, and what changes once the recipient is a client rather than staff.
The €100 annual gift exemption
Under Section 9, paragraph 1 of the Law "On Personal Income Tax" (Likums "Par iedzīvotāju ienākuma nodokli"), gifts an employer gives to an employee are exempt from personal income tax up to €100 per employee, per calendar year. That threshold was raised from €15 effective 1 January 2025, a sixfold increase that makes meaningful branded merchandise a realistic tax-free option for the first time.
Three details matter more than they might seem:
- It's a flat annual cap, not an occasion-based allowance. A common misconception is that the exemption only applies to a specific event, a work anniversary, a holiday, a birthday. It doesn't. The rule is simply an aggregate ceiling of €100 per employee for the whole calendar year, regardless of why the gift was given or how many separate gifts make up that total.
- Cash and in-kind gifts are treated identically. A €100 bonus in cash and a €100 branded gift box use up the same allowance in the same way. There's no separate, more generous track for physical gifts.
- Only the excess is taxed, not the whole gift. If an employee's cumulative gifts for the year come to €130, only €30 becomes taxable income, not the full €130. And that excess is likely also subject to mandatory state social insurance contributions (VSAOI), by strong analogy with how Latvia treats other similar excess-benefit situations, so it's worth budgeting for both PIT and VSAOI on any amount above €100, not PIT alone.
In practice, this means a single gift priced comfortably under €100 leaves headroom for other small gifts or a bonus later in the year without breaching the cap, as long as the running total for that employee stays at or below €100.
12 gift ideas
All twelve picks below sit well under the €100 ceiling on their own, leaving room to combine a couple of smaller gifts across the year if you want to. Prices are per-unit list pricing; exact cost depends on decoration and order volume.
1. Sports Socks: the easy everyday gift
Socks are an easy, low-friction gift: everyone wears them, sizing is forgiving, and a bold branded pattern reads as fun rather than corporate. They also work well handed out to a whole team at once, since the low unit cost keeps a group gift far under the €100 cap per person.
- Material: soft cotton-blend knit with a reinforced heel and toe.
- Branding: woven or sublimated logo pattern across the leg.
- Order: MOQ 100 · from €4.00.
2. Recycled PET Pen: the smallest gift that still counts
At just over a euro, a branded pen is the smallest gift on this list, and a natural add-on to a bigger present without pushing anyone near the €100 line. Made from recycled PET, it also gives the gift a small sustainability story worth mentioning in an internal note.
- Material: body made from recycled PET plastic bottles.
- Branding: single-color or full-color logo print along the barrel.
- Order: MOQ 300 · from €1.33.
3. A5 Notebook: for the note-takers
A well-made notebook still gets used in most offices, whether for meeting notes or as a desk accessory. It's an easy pairing with a pen for a small combined gift that stays far below the annual threshold.
- Material: recycled-paper pages with a soft-touch or kraft cover.
- Branding: debossed or printed logo on the front cover.
- Order: MOQ 100 · from €4.58.
4. Premium Tote Bag: an everyday carry
A sturdy tote gets carried outside the office, on the commute, at the market, which makes it one of the more visible branding opportunities on this list relative to its price. It's substantial enough to feel like a real gift without using up much of the €100 allowance.
- Material: heavyweight cotton canvas with reinforced stitched handles.
- Branding: screen-printed or embroidered logo on the front panel.
- Order: MOQ 100 · from €6.44.
5. Knitted Scarf: a winter favorite
Latvian winters make a warm, well-made scarf a genuinely useful gift rather than a token one, which is exactly the kind of item that reads well even though it's still comfortably under the exemption ceiling.
- Material: soft knitted acrylic or wool-blend yarn.
- Branding: woven label or jacquard logo pattern.
- Order: MOQ 100 · from €7.66.
6. Baseball Cap: casual and on-brand
Caps are a reliable pick for outdoor events, company outings, or just everyday wear, and an embroidered logo tends to look more premium than the price tag suggests.
- Material: cotton twill with an adjustable strap closure.
- Branding: embroidered logo on the front panel.
- Order: MOQ 100 · from €8.34.
7. Espresso Mug: for the coffee break
A good espresso mug earns daily use at the office coffee machine, which makes it one of the higher-visibility, lower-cost gifts available. It's an easy way to put a logo somewhere people look at multiple times a day.
- Material: glazed ceramic, dishwasher and microwave safe.
- Branding: printed or laser-etched logo.
- Order: MOQ 108 · from €8.44.
8. Canvas Travel Pouch: small-batch friendly
With a minimum order of just 25 units, this pouch is a good option for smaller teams or a department-level gift, without needing to hit a large-batch minimum order quantity.
- Material: durable cotton canvas with a zip closure.
- Branding: printed logo on the front.
- Order: MOQ 25 · from €8.30.
9. Recycled Steel Bottle: a sustainable staple
A double-walled bottle made from recycled steel checks two boxes at once: it's genuinely useful, and it lets the company make a sustainability point without the gift itself costing much more than the other items on this list.
- Material: double-walled stainless steel made from recycled material, keeps drinks cold or hot for hours.
- Branding: laser engraving or printed logo.
- Order: MOQ 50 · from €11.00.
10. Wireless Mini Speaker: a step up in tech
For teams that want a gift with a bit more "wow" factor, a compact wireless speaker is one of the more premium items here while still leaving plenty of room under the €100 exemption for a further small gift later in the year if needed.
- Material: compact housing with Bluetooth connectivity.
- Branding: printed or debossed logo on the housing.
- Order: MOQ 50 · from €10.34.
11. Stainless Steel Bottle: hydration, branded
A classic stainless bottle is one of the safer choices when you want something that will actually get reused at the gym or on the commute, rather than sitting in a drawer.
- Material: single or double-walled stainless steel with a leak-proof lid.
- Branding: laser engraving or printed logo.
- Order: MOQ 50 · from €9.57.
12. Americano Mug: budget-friendly and classic
Closing the list with one of the most affordable options: a classic Americano mug is a safe, familiar gift that still gets a logo in front of someone every morning.
- Material: glazed ceramic in a classic Americano shape.
- Branding: printed or laser-etched logo.
- Order: MOQ 108 · from €4.04.
What about client gifts?
Gifts to clients and business partners are governed by a completely different part of Latvian tax law, and the two regimes are easy to confuse. Latvia runs a distributed-profit corporate tax system, similar to Estonia's: companies generally aren't taxed on profit until it's distributed or spent in ways the law treats as equivalent to distribution.
"Representation expenses" (reprezentācijas izdevumi), which include business-partner hosting as well as low-value branded promotional items, are capped under Article 8 of the Law on Corporate Income Tax (Uzņēmumu ienākuma nodokļa likums). Together with personnel-sustainability event costs, these expenses can't exceed 5% of the company's total gross wages, including employer social contributions, paid in the prior reporting year.
Cross that 5% ceiling and the excess isn't simply disallowed as a deduction: it's reclassified as a "conditional profit distribution" and taxed immediately, in the last quarter of that reporting year, at an effective rate of roughly 25% (the value divided by 0.8, multiplied by 20%). That's a materially different, and generally harsher, consequence than the excess-only income tax treatment that applies to employee gifts above €100.
Separately, on the VAT side, a "small-value gift" (mazvērtīga dāvana), meaning goods or services given free of charge worth up to €15 excluding VAT per recipient per calendar year, falls outside the scope of VAT under Article 1, point 10 of the VAT Law (Pievienotās vērtības nodokļa likums). Importantly, input VAT on such gifts remains deductible even though the gift itself sits outside VAT's scope.
Common mistakes
- Assuming the €100 exemption requires a specific occasion. It doesn't. The current rule is simply a flat annual cap per employee, regardless of whether the gift marks a holiday, a company anniversary, or nothing in particular.
- Confusing the employee €100 rule with the client-gift rule. These are entirely different regimes: employee gifts follow the €100 personal-income-tax exemption, while client and business-partner gifts follow the 5%-of-prior-year-payroll representation-expense cap under corporate tax, with a much harsher consequence (an immediate ~25% conditional-profit-distribution tax) if that cap is exceeded.
- Forgetting that VSAOI likely applies to any excess above €100. The exemption covers personal income tax on the first €100, but the amount above it is likely also subject to mandatory state social insurance contributions, not personal income tax alone, so budget for both.
This article is for general information only and does not constitute tax, accounting, or legal advice. Latvian tax law can change, and individual circumstances vary. Confirm current rules with a licensed Latvian tax advisor or accountant before making gifting decisions for your company.
Want more ideas?
The twelve picks above are just a starting point. For a longer list spanning apparel, bags, stationery, drinkware, and tech, all priced with EUR pricing and MOQs, see our companion roundup: 20 Tax-Free Gift Ideas for Employees in Latvia (Under €100).
Ready to plan compliant, on-brand gifting for your team in Latvia? Talk to Sunday about sourcing, branding, and shipping employee gifts that stay comfortably within the €100 exemption.
