Latvian VAT rates and VAT compliance

As an EU member state, Latvia follows EU rules on value added tax (VAT) compliance. Latvian VAT is administered by the State Revenue Service (Valsts ieņēmumu dienests – VID).

Latvia applies a standard VAT rate, alongside reduced rates and zero-rating for specific goods and services.

Some supplies are exempt from VAT in Latvia. These commonly include:

• Certain financial and insurance services
• Healthcare and medical services
• Education and vocational training
• Certain cultural and social services
• Residential rental of immovable property

Exempt supplies do not generate output VAT and generally do not allow recovery of input VAT related to those activities.

A VAT number is required for businesses carrying out taxable activities in Latvia.

• Latvian-established businesses must register for VAT once annual taxable turnover exceeds €50,000 in a calendar year. Below this threshold, registration is not mandatory unless specific taxable transactions trigger compulsory registration.
• Non-established (foreign) businesses making taxable supplies in Latvia must generally register for VAT from the first taxable supply. There is no turnover threshold for nonresidents.
• For cross-border B2C supplies of goods and services within the EU, the EU One-Stop Shop (OSS) threshold of €10,000 applies. Once exceeded, Latvian VAT must be charged, or the supplier may elect to use the OSS scheme.

Get more information on VAT registration in Latvia.

VAT-registered businesses in Latvia must file periodic VAT returns. Filing frequency depends on turnover:

• Monthly: Default for most VAT-registered businesses
• Quarterly: Available to businesses whose annual taxable turnover does not exceed €40,000

Returns include output VAT on sales and recoverable input VAT on purchases. In addition to VAT returns, businesses may also be required to submit:

• EC Sales Lists (EU Sales Lists)
• Intrastat declarations (for intra-EU goods movements above thresholds)

All filings are submitted electronically through VID’s Electronic Declaration System (EDS).

Get more information on VAT returns in Latvia.

Foreign businesses storing goods in Latvia must consider VAT registration if those goods are held for sale.

Holding inventory in Latvia for resale typically triggers VAT registration obligations. Imports from outside the EU may also trigger VAT registration, particularly where the foreign business acts as importer of record.

Latvia applies EU call-off stock simplification rules in line with the EU VAT Directive.

VAT is generally payable on the importation of goods into Latvia.

• Import VAT is due at customs clearance.
• VAT-registered businesses may recover import VAT as input VAT if the goods are used for taxable activities.
• Latvia allows postponed accounting for import VAT in certain circumstances, subject to compliance conditions.

Foreign businesses supplying digital services (telecommunications, broadcasting, and electronically supplied services) to Latvian consumers must charge Latvian VAT once the €10,000 EU-wide B2C threshold is exceeded, unless they elect to use the One-Stop Shop (OSS) scheme.

• The standard VAT rate (21%) generally applies.
• Businesses must register for Latvian VAT or use OSS depending on their cross-border supply model.

EU-established businesses may reclaim Latvian VAT through the EU VAT refund procedure via their home tax authority, generally by 30 September of the following year.

Non-EU businesses may reclaim Latvian VAT under the 13th Directive refund procedure, subject to reciprocity and documentation requirements.

Some foreign businesses making only reverse-charge supplies may not be required to register locally and may instead rely on simplified recovery mechanisms.

Latvia applies zero-rating to qualifying exports of goods and certain services supplied outside the EU. Zero-rating allows VAT to be charged at 0% while preserving the right to recover related input VAT, provided documentary requirements are met.

Latvia does not operate a special export VAT authorisation scheme similar to Ireland’s Section 56 system.

Intrastat declarations monitor intra-EU trade in goods. Latvian VAT-registered businesses must submit Intrastat filings if annual thresholds set by the Central Statistical Bureau are exceeded.

• Reporting is typically monthly once thresholds are exceeded.
• Filings include commodity codes, values, quantities, and partner member state details.
• Submissions are made electronically via the designated reporting systems.

Latvia requires EC Sales Lists for supplies of goods and certain services to VAT-registered customers in other EU member states.

Details typically include:

• Customer VAT identification numbers
• Total value of goods or services supplied
• Transaction type

ESLs must be filed electronically with VID, generally on a monthly basis.

Businesses must issue VAT-compliant invoices that include:

• Supplier and customer details
• VAT number(s)
• Description of goods or services
• VAT rate(s) and VAT amount

Latvia does not operate a real-time invoice reporting clearance system comparable to Hungary’s Online Számla, but electronic invoicing may be required in specific B2G contexts.

Time-of-supply rules:

• Goods: VAT generally becomes chargeable when the goods are delivered or the invoice is issued, whichever occurs first.
• Services: VAT is generally due at the time the service is supplied or when payment is received, depending on the circumstances.
• Imports: VAT is due at customs clearance.

VAT records must generally be retained for five years. VAT returns and payments are generally due by the 20th day of the month following the reporting period.