VAT in Latvia
Latvia implemented a Value Added Tax in 1995, and its regulations regarding VAT registrations, returns, and adherence to EU VAT Directives are incorporated into its VAT Act. The collection of this tax is overseen by the State Revenue Service, which operates under the Latvian Ministry of Finance.
The Latvian Value Added Tax Law (2012/197.2) came into effect on January 1, 2013, and it governs the imposition of Latvian VAT. Foreign companies, also referred to as “non-resident” traders, may be obligated to register for Latvian VAT if they provide goods or services to local businesses or customers in Latvia. Once registered, they must comply with Latvian VAT standards, including invoicing and VAT rates, and settle any outstanding Latvian VAT obligations.
Everything related to VAT in Latvia is included in our comprehensive guide below.
Selling in Latvia?
Scope of Taxation
In Latvia, VAT is generally applicable to taxpayers who are located or registered in the country, as well as to transactions (i.e., the supply of goods or services) that take place within Latvia or involve a counterparty that is resident in Latvia, unless an exemption or exception applies. Furthermore, Latvian VAT is also applicable to imports into the country.
According to Article 5 of the Latvian VAT Law, taxable transactions typically involve:
- The supply of goods or services in exchange for payment.
- Intra-Community supplies and acquisitions that involve payment.
- Imports and exports of goods.
- The acquisition of a new vehicle within the EU by an unregistered person or a person who is not a taxpayer.
Taxable Supplies
The taxation of goods provided within Latvia, including exports and the delivery of goods to other EU Member States, is generally governed by Article 5 of the Latvian VAT Law.
As stated in Article 1(20) of the Latvian VAT Law, a supply of goods is commonly defined as the transfer of the right to dispose of tangible assets as the owner. Additionally, the following transactions are recognized as supplies of goods:
- Immovable property, or a portion of it.
- Energy sources such as electricity, fuel, heat energy, heating, water, steam, and cooling.
Download the Latvian VAT Guide
Latvia – General VAT information
| Tax authority | The Latvian State Revenue Service |
| VAT in local language | Prevents vertības nodoklis (PVN) |
| Currency | € Euro |
| VAT number format | LV + 11 characters |
| LV12345678901 | |
| VAT rates
|
Standard 21%; Reduced 12% and 5%; |
| Zero-rated (0%) and exempt | |
| Thresholds | |
| Registration | |
| Established | EUR 40,000 |
| Non-established | None |
| Intra-EU Distance sales and electronically supplied services to consumers (OSS) | EUR 10,000 |
| VAT Group | Allowed – allows for the group to be regarded as a single entity for VAT purposes. |
| Voluntary Registration | Available – if the amount of taxable supplies made in the past 12 months is higher than the registration threshold for VAT |
| Intra-EU Dispatches | EUR 150,000 |
| Intra-EU Arrivals | EUR 280,000 |
| Recovery of VAT by non-established businesses | Yes |
| Compliance Returns and Deadlines | |
| VAT Returns | 20th day of the month after the end of the taxation period |
| Frequency | Monthly and Annually |
| European Sales Listing | 20th day of the month after the end of the taxation period |
| Intrastat | 10th day of the following month |
| Electronic Invoicing | In Latvia, the use of electronic invoicing is typically not mandatory but optional. |
Last Updated: 13/10/2023
Disclaimer
The information provided by Global VAT Compliance B.V. on this webpage is intended for general informational purposes only. Global VAT Compliance B.V. is not responsible for the accuracy of the information on these pages, and cannot be held liable for claims or losses deriving from the use of this information. If you wish to receive VAT related information please contact our experts at support@gvc.tax