VAT in Latvia

Are you shipping goods to customers in Latvia? Check if you should register for Latvian VAT and what the VAT rates are in Latvia. Read on to find out more.

VAT in Latvia - table of contents:

The Value Added Tax (VAT) was introduced in Latvia in 1995. The European Union regulates the registration, filing of declarations, and compliance with Latvian VAT rules through relevant EU Directives. Latvia has implemented the provisions of the directives by transferring their content (and consequently their applicability) into its own VAT law. VAT in Latvia is administered by the Latvian State Revenue Service, which is part of the Ministry of Finance.

Should you register for VAT in Latvia?

The obligation to register for VAT in Latvia exists in, among others, the following cases:

import of goods through the territory of Latvia from another country (both from the EU and outside the EU),
movement of goods between Latvia and other EU member states as part of intra-community supplies (in the form of sales or purchases of goods),
purchase and sale of goods in Latvia,
storage of goods in consignment warehouses,
organization of exhibitions/conferences/trainings/other live events for which entry is paid at the entrance,
e-commerce sales, after exceeding the threshold of 42,000 euros (this limit should be combined for B2C sales throughout the EU).

IMPORTANT!

Entrepreneurs providing services and selling goods online to consumers within the EU, whose turnover from such sales exceeds 42,000 euros ( for all countries), instead of registering for Latvian VAT, can register for VAT OSS.

What information is required to obtain a Latvian VAT number and registration?

For companies not considered tax residents of Latvia, the Latvian Tax Office will require the completion of the relevant form (VAT-22), along with the submission of necessary documentation:

VAT certificate confirming the registration of the company as a VAT taxpayer in a location outside the territory of the European Union (if applicable),
extract from the national trade register of the company.

Is a Latvian fiscal representative or agent required?

A local Latvian agent or representative is not required by a company operating in another EU member state.

Compliance with Latvian VAT

When a company registers for Latvian VAT, it becomes subject to local regulations governing various aspects. These include, among others:

Issuing invoices containing sensitive data (as specified in the Latvian VAT law),
electronic invoices equipped with an appropriate electronic signature, with approved authenticity and the recipient’s consent,
maintaining accounting records, the storage period of which must last at least 10 years,
proper invoicing of customers for goods or services (in accordance with Latvian VAT regulations regarding delivery time),
processing credit notes and other corrections, and using approved foreign currency exchange rates.

RATE	TYPE	TYPE OF GOODS OR SERVICES
21%	standard	all goods and services not covered by the lower VAT rate,
12%	reduced	baby food, pharmaceutical products, medical products for people with disabilities, local passenger transportation, books (excluding e-books), newspapers and magazines, accommodation in hotels, district heating,
5%	reduced	assortment of locally produced vegetables and fruits,
0%	zero	intra-Community and international transportation.

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Author: Lucy Adams
She has extensive knowledge in the field of accounting and constantly gains experience working for both small businesses and larger corporations. Her mission is to explain complex financial and accounting issues and teach business owners and those interested in the subject how to manage their finances effectively. She enjoys giving practical advice, discussing current accounting issues, and analyzing legislative changes that may affect business operations. She enjoys a straightforward approach to finance that helps entrepreneurs focus on growing their businesses. She translates complex issues into easy-to-understand language so that anyone can confidently make decisions that impact the success of their business.
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