VAT Registration in Latvia
To register for VAT, both domestic and nonresident individuals are required to submit an application to the State Revenue Service, which will be processed within five business days upon the submission of all requested information.
According to Article 59 of the VAT Law, domestic taxpayers are required to register for VAT if the total value of taxable supplies made in the preceding 12 months exceeds the VAT registration threshold. Once this threshold is reached, taxpayers must register for VAT purposes. In Latvia, the VAT registration threshold is set at EUR 40,000.
Read all about VAT registration in Latvia in our comprehensive guide.
Register for VAT in Latvia
The same VAT registration threshold applies to domestic public bodies, and if they surpass this threshold, they must register as taxable entities for VAT purposes. Prior to providing services to another Member State, a domestic company must register for VAT in Latvia.
Here are some common examples of transactions that are subject to VAT:
- Provision of goods, including goods provided within the European Union (EU) and goods exported.
- Provision of services within Latvia.
- Intra-Community acquisition of goods by a taxable person from another EU Member State.
- Importation of goods into Latvia, regardless of the importer’s status.
- Acquisition of new automobiles inside the EU by an unregistered or nontaxable entity.
- Supply of new vehicles from Latvia to other EU Member State.
- Self-supply (consumption) of products and services.
- Reverse-charge services acquired by a taxable individual formed in Latvia.
A non-resident taxpayer refers to a taxpayer who is not based in Latvia and does not have a permanent establishment in the country. In Latvia, a non-resident business is usually required to register for VAT when it makes any supplies that are not subject to the reverse charge mechanism within the country.
Selling in Latvia?
Registration in Latvia
Taxable Persons
A taxpayer is typically defined as an individual who engages in economic activities independently, regardless of the location or outcome of such activities. Under the VAT Law, taxpayers are categorized as follows:
- Domestic taxpayers.
- Taxpayers from other European Union Member States.
- Taxpayers from third countries or territories.
Mandatory Registration
A domestic taxpayer is required to register for VAT if the value of taxable supplies in the previous 12 months exceeds the VAT registration threshold. On exceeding this threshold, taxpayers must register for VAT purposes. A domestic business making a supply of services to other Member States must register for VAT in Latvia before making the supply
Voluntary Registration
A domestic individual has the option to register for VAT voluntarily in Latvia. However, they are not obligated to do so if the total value of taxable goods and services they have supplied in the previous 12 months is less than the registration threshold. Once the registration threshold is exceeded, domestic individuals are required to register for VAT as taxable persons.
Exemptions from Registration
A domestic business in Latvia is not obliged to register for VAT if it does not surpass the registration threshold. Moreover, if the business reaches the registration threshold with a single transaction but does not carry out any more taxable supplies in the following 12 months, it is not required to register for VAT.
Group and Divisional Registration
In Latvia, VAT grouping is not mandatory according to the VAT Law. However, if at least one member of the group has provided taxable supplies of goods and services worth at least 350,000 euros in the 12 months prior to the VAT group’s registration, a VAT group may be established under Article 64 of the Latvian VAT Law.
VAT Representative
If the taxpayer is located in a non-EU country, they must appoint a fiscal representative for reporting and paying VAT. The fiscal representative must be registered with the State Revenue Service and have a separate fiscal representative registration number.
Distance Sales
Non-Latvian EU e-commerce sellers who ship their products from within the EU are required to charge local Latvian VAT on all their sales. This applies to imported distance sales that do not exceed €150 and are liable to Latvian sales VAT. Sellers may use the Import One-Stop Shop (IOSS) return option to comply with their VAT obligations.
Registration Requirement
Taxable individuals are obligated to register with the VAT authorities in the jurisdiction where their business is established. This typically involves registering with the local branch of the tax authority. However, non-resident taxable individuals who have a permanent establishment in Latvia must register with the relevant VAT authority at the location of their fixed establishment.
Fiscal representation
A taxpayer may designate a fiscal representative for Latvian VAT purposes by explicitly allowing the agent to act on its behalf in submitting and paying VAT. The fiscal representative will be accountable to the taxpayer under the terms of the contract and will be responsible for tax collection from the tax authorities. A taxpayer based outside the EU must designate a fiscal representative to manage VAT reporting and payment.
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
