VAT GUIDE IN LATVIA
LATVIAN VAT GUIDE FOR BUSINESSES
VAT in Latvia is a consumption tax applied to most goods and services at each stage of the supply chain, from production to the final sale to consumers. VAT in Latvia is governed by the Value Added Tax Law, which is aligned with the EU VAT Directive, as Latvia is a member of the European Union. The tax is administered by the State Revenue Service (Valsts ieņēmumu dienests – VID).
Businesses and individuals making taxable supplies in Latvia may be required to register for VAT, either mandatorily or voluntarily, depending on turnover and activity type. VAT registration rules, invoicing requirements, reporting obligations, and compliance procedures in Latvia broadly follow EU-wide principles but also include local specifics regarding deadlines, documentation, and electronic reporting.
Menu
VAT Rates
Who Needs to Register for VAT?
In Latvia, a taxable person is any individual, legal entity, VAT group, or fiscal representative engaged in economic activity and registered with the State Revenue Service (SRS).
Registration threshold: Local businesses must register for VAT if taxable turnover exceeds EUR 50,000 in a calendar year. Registration is due by the 15th of the month following the period when the threshold is exceeded, with limited deferral possible if the excess is ≤ EUR 5,000. Voluntary registration is allowed.
Special thresholds:
- Supplies to other EU Member States: No VAT is charged if turnover does not exceed EUR 100,000 EU-wide, provided SRS is notified.
- Intra-Community acquisitions: VAT registration required if annual value ≥ EUR 10,000. A special registration procedure (from 1 July 2025) allows exemption from charging VAT on onward supplies if ≤ EUR 50,000 turnover, but no input VAT deduction is allowed.
Service rules: VAT registration is required before supplying services to taxable persons in another EU Member State when those services are taxable there under reverse charge.
Authorities: State or municipal bodies must register before receiving construction services under public procurement or public–private partnership projects.
Non-established businesses: Must register if making taxable supplies in Latvia. Reverse charge may apply in some cases, shifting VAT liability to the Latvian recipient, but this does not apply to supplies to private individuals.
VAT Obligations
VAT Invoices
A taxable person is generally required to issue a VAT invoice for all taxable supplies and exports within 15 days of the supply date or the receipt of an advance payment.
Records
In Latvia, VAT records must be based on supporting documents such as invoices, agreements, transport documents, customs declarations, and accounting registers, which must be systematically organized and archived. VAT books and records can be stored outside Latvia if kept electronically with full online access for SRS. Invoices must be retained for 5 years, or 10 years for those related to immovable property. Electronic archiving is permitted under the same online access conditions.
VAT Deadlines
In Latvia, VAT returns are filed via the EDS by the 20th of the month following the tax period, either monthly (required for the first six months after VAT registration, if annual taxable transactions exceed EUR50,000, or for intra-EU supplies) or quarterly (if transactions are below EUR50,000 and no intra-EU supplies are made).
VAT payments are due within 23 days after the tax period ends to the State Budget’s single tax account. Annual VAT returns, due by 1 May, are required in specific cases such as changes in the taxable-to-nontaxable ratio, adjustments under VAT law, provision of financial services, or application of the deposit system for reusable packaging, with any tax due also payable by 1 May.
VAT Refund
In Latvia, non-established businesses not registered for VAT can recover VAT they incur.
EU businesses: Refunds follow EU Directive 2008/9/EC, available only if no taxable supplies are made in Latvia (excluding reverse charge cases). Decisions take 4–8 months, with payment within 10 days after approval; late payments accrue interest.
Non-EU businesses: Refunds follow the EU 13th Directive and are granted only to businesses in countries with reciprocity (Norway, Switzerland, Iceland, Monaco, UK).
Applications can be in Latvian or English and submitted electronically via the EDS if access is established.
Penalties for non-compliance
Late or non-registration:
EUR 50–350 fine; undeclared VAT incurs up to 30% penalty plus 0.05% daily interest; late VAT payment also charged 0.05% per day.
Late return filing:
3–10 days late: up to EUR 70
11–20 days: EUR 75–150
21–30 days: EUR 155–280
Over 30 days: EUR 285–700
Late informative return (>2 days): up to EUR 150, waived for first minor delay in 12 months.
Errors:
Up to 30% penalty plus 0.05% daily interest; incorrect VAT registration details may lead to fines up to EUR 700 and possible disqualification from company board roles for up to 3 years.
Fraud/tax evasion:
Fines of EUR 140–2,000, possible disqualification; issuing unlawful invoices can lead to 100% tax penalty; failure to account for output tax or reverse charge VAT incurs 10% penalty; repeat offences double fines.
Other serious breaches:
Withholding required information or providing false details may incur up to EUR 700 fine; refusal to allow tax officers access can result in fines up to EUR 14,000.
Common VAT Terms
- Pievienotās vērtības nodoklis (PVN) – Value Added Tax (VAT)
- Nodokļu maksātājs – Taxable person
- Reģistrācijas slieksnis – Registration threshold
- PVN reģistrācija – VAT registration
- PVN grupa – VAT group
- Reversā maksāšana – Reverse charge
- Priekšnodoklis – Input tax
- Izejošais nodoklis – Output tax
- PVN rēķins – VAT invoice
- Nodokļu deklarācija – Tax return
- PVN atmaksa – VAT refund
- Nodokļu pārkāpums – Tax infringement
- Administratīvais sods – Administrative penalty
- Pievienotās vērtības nodokļa likme – VAT rate
- Piegāde – Supply
- Pakalpojums – Service
- Iekšzemes piegāde – Domestic supply
- Eksports – Export
- Imports – Import
- Kopienas iekšējais darījums – Intra-Community transaction
