Latvia VAT guide
Latvia introduced Value Added Tax (VAT) in 1995. The rules on Latvian VAT are based on EU VAT directives, as the country is a member of the European Union since 2004.
The tax is administered by the State Revenue Service which is part of the Latvian Ministry of Finance.
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What is the VAT rate in Latvia?
21%
Standard VAT rate: 21%
Reduced VAT rates: 12% and 5%.
There is a reduced-rate of VAT of 12%, a second reduced-rate of 5% on certain types of fresh fruit, berries and vegetables. Furthermore, there is a 14% flat-rate compensation percentage for farmers.
VAT registration in Latvia
If business turnover exceeds the threshold of €50,000 it must register for VAT by the 15th day of the month following that period. Voluntary VAT registration is also possible before reaching the threshold.
The thresholds in Latvia are the following:
- Distance selling: €10,000
- Intra-Community Acquisitions: €10,000.
- Electronically supplied services (MOSS): €10,000.
Deadlines and VAT filing frequency
VAT returns are generally filed quarterly.
Monthly returns can be filed when a trader makes intra-EU supplies exceeding €50,000 per year.
The payment deadline is the 23rd day of the month following the reporting period.
EU Sales List (ESL) is required if a taxable person performs Intra-Community supplies of goods and services. The ESL report is also submitted on a monthly basis by the 20th day following the end of the month.
EU Purchase List (EPL) is required if a taxable person performs Intra-Community acquisitions of goods and services.
Invoicing requirements for Latvia
The details on a VAT invoice are crucial for establishing VAT liability on the goods or services provided, and it also enables VAT registered customers to reclaim VAT charged. There are certain requirements regarding the content of an invoice, which includes:
- Invoice issue date.
- A date of the supply if different from the invoice date.
- Invoice number.
- VAT number of the supplier.
- Full address of the supplier and customer.
- Description of the goods or services provided.
- Details of quantities of goods.
- Net amount of the supply.
- VAT amount.
- Gross amount.
- VAT rate applied.
- Details to support zero VAT – export, reverse charge or intra-community supply.
- Reference to the VAT law or the directive if the 0% VAT if reverse charge or another special regime applies.
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Agents and fiscal representatives
Businesses in Latvia have the opportunity to appoint a fiscal representative to act on their behalf regarding their VAT compliance.
In case of businesses established outside the EU it is not compulsory to appoint a fiscal representative to register for VAT purposes – they can register in their own names.
IOSS
The Import One Stop Shop was introduced on 1 July 2021. The main goal of IOSS is that a taxable person can register in only one EU Member State to declare and pay all EU VAT due on the goods imported within the scope of IOSS.
It can be used for goods that are located outside the EU at the time of being sold, they are dispatched in consignments of an intrinsic value not exceeding €150, and they are not subject to excise duties. If the supplier is registered for IOSS, all import VAT due under IOSS through the EU can be reported in one return.
Intrastat
The aim of Intrastat declarations is to collect statistical data on the movement of goods between EU Member States. EU Member State businesses subject to VAT must submit a declaration on Intra-Community trade when their taxable transactions exceed a specified threshold amount.
The Intrastat thresholds in Latvia are:
- Arrivals: €380,000
- Dispatches: €220,000
- Arrivals detailed: €5,500,000
- Dispatches detailed: €7,500,000
VAT rules on eCommerce in Latvia
Latvia has implemented VAT rules of e-commerce since 1 July 2021. The rules also include that import VAT will be due on all low-value goods imported into Latvia from non-EU countries (currently, the importation of goods for personal use with a value not exceeding €22 is exempt from VAT).
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