Latvia introduced Value Added Tax in 1995. The rules on Latvian VAT registrations, returns and compliance are based on European Union EU VAT Directives which Latvian has transposed into its VAT Act. The tax is administered by the State Revenue Service which is part of the Latvian Ministry of Finance.
Foreign companies, or ‘non-resident’ traders, providing goods or services in Latvia to local businesses or consumers may have to register their business for Latvian VAT. They will then have to follow the Latvian VAT compliance rules, including invoicing and VAT rates, as well as pay over any Latvian VAT due.
There are a number of trading situations which typically require a foreign trader to register with the Latvian tax authorities. These follow the broad EU VAT rules, and include:
- Importing goods into Latvia from another country, either from within the EU or from outside the EU
- Moving goods between Latvia and other EU member states (intra-community supplies), either as sales (dispatches) or purchases (arrivals)
- Buying and selling goods in Latvia
- Selling goods over the internet to Latvian consumers, subject to the Latvian distance selling VAT regisration threshold
- Goods held in consignment stock
- Holding live exhibitions, events or training in Latvia
- If a company is otherwise a non-VAT trader, but is receiving services in Latvia under the reverse charge rule
- The self supply of goods
Few companies need to VAT register if they are providing services to local Latvian companies, and instead can use the Reverse Charge process. This is based on the 2010 VAT Package changes.
Note that providers of electronic, broadcast or telecoms services to consumers in Latvia only have to VAT register in one EU country under the MOSS scheme to file a single return covering all 28 member states.
If you do need to VAT register, read our Latvian VAT registration briefing to understand the requirements, including the VAT registration thresholds. You can also read more about Latvian VAT returns.
Need help with your Latvian VAT compliance?
Researching Latvian VAT legislation is the first step to understanding your VAT compliance needs. Avalara has a range of solutions that can help your business depending on where and how you trade.
Latest Latvian news
January 25, 2019
The European Commission (EC) has proposed switching from unanimous to majority voting on EU VAT and other tax policies. The aim is to progress fiscal reforms which face immovable opposition from just a limited number of member states.
January 09, 2019
The EU VAT Directive has been updated from 1 January 2019 to introduce a voluntary generalised reverse charge measure on domestic transactions in member states.
December 28, 2018
Following agreement by EU member states to permit cutting the VAT rate on e-books and online journals to match the reduced/zero rating permitted on their paper-based equivalents, the following countries have already announced reductions...
- Czech Republic
- United Kingdom