Latvian VAT returns

Once registered for value added tax (VAT) in Latvia, businesses must declare all taxable transactions and remit any VAT due to the State Revenue Service (Valsts ieņēmumu dienests – VID).

Latvian VAT returns are generally filed on a monthly basis. However, quarterly filing may be permitted in certain circumstances.

• Monthly filing is the default requirement for most VAT-registered businesses.
  
• Quarterly filing may be allowed for businesses with lower taxable turnover, typically not exceeding €40,000 in the previous year.
• Annual VAT return filing is not standard practice under Latvian VAT law.

VID assigns the filing frequency at the time of VAT registration and may revise it based on turnover or compliance history.

VAT returns must generally be submitted by the 20th day of the month following the end of the reporting period.

VAT-registered businesses in Latvia must maintain comprehensive VAT records, including:

•  Sales and purchase invoices
• EU Sales Lists (recapitulative statements), where applicable
• Import and export documentation
• Accounting records and journals supporting VAT calculations
• Intrastat reports, where thresholds are exceeded

Records must generally be retained for at least five years and must be made available for inspection by VID upon request.

VAT payments are due on the same date as the VAT return filing deadline (generally the 20th day following the reporting period).

Late payments may result in interest charges, late-payment penalties, and additional sanctions under Latvian VAT law.

Input VAT may generally be reclaimed on goods and services used for taxable business activities, including:

• Goods purchased for resale
• Capital assets and business equipment
• Professional services, utilities, and overhead costs
• Import VAT on goods used in taxable supplies
• Pro rata deductions for mixed-use expenses where permitted

Input VAT is not deductible on private or non-business expenses. Specific restrictions may apply to certain expenses, such as passenger vehicles, entertainment costs, and non-business benefits.

All Latvian VAT returns must be submitted electronically through VID’s Electronic Declaration System (EDS) using the taxpayer’s secure login credentials.

VAT payments are typically made via bank transfer to the State Treasury account designated by VID.

Penalties may apply for VAT noncompliance, including:

• Late filing penalties for overdue VAT returns
• Interest on late VAT payments
• Penalties for incorrect, incomplete, or misleading VAT returns
• Additional sanctions in cases of repeated noncompliance or tax evasion

VID publishes guidance on applicable penalty rates and enforcement procedures, which may change over time.

If input VAT exceeds output VAT for a given reporting period, the resulting VAT credit may be:

• Carried forward to offset future VAT liabilities, or
• Refunded by VID, subject to statutory conditions and review

Refunds are typically processed within 30 days, although this period may be extended if VID conducts additional checks or requests supporting documentation. Processing times may vary depending on the taxpayer’s compliance profile and the size of the refund claim.