Latvia
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Digital services
About
Goods
About
Goods
About
Digital services
About
Digital services
Goods
Digital services
Goods
Digital services
This guide is for e-commerce companies that sell online via web stores or at marketplaces to Latvian consumers.
VAT Standard rate
The standard VAT rate in Latvia in 2024 is 21%.VAT Reduced rate
12% Certain products and services are eligible for the special reduced rate, including:- Medicine and medical equipment;
- Specialized baby food;
- Regular transportation services for passengers and their luggage are provided in the domestic territory;
- Educational literature and original literature;
- Newspapers, magazines, and other periodicals;
- Accommodation services in tourist homes;
- Supplies of heating wood to people for consumption in households;
- Supplies of thermal energy to people for consumption in households.
- Some kind of foodstuffs.
VAT Standard rate
The standard VAT rate in Latvia in 2024 is 21%.VAT Reduced rate
A reduced rate of 5% applies to digital:- Books;
- Newspapers;
- Magazines;
- News agency announcements.
VAT Standard rate
21%
VAT Reduced rate
12%, 5%
Thresholds
€10,000
Thresholds
From the 1st of July 2021, the distance selling thresholds were withdrawn and replaced by a unified threshold of €10,000 for all EU members. In other words, VAT should be charged at the VAT rate of the customer’s country of residence by companies whose annual taxable cross-border turnover is over €10,000.Deductible VAT
If goods or services were used to make taxable supplies in Latvia, VAT in input invoices might be credited. Examples include:- VAT paid at custom clearance with your EORI number;
- VAT paid to Latvian suppliers.
Registration procedure
When a company has the obligation to register, the owners will be required to complete and submit a VAT registration form, along with supporting documentation:- Certificate of incorporation;
- Trade register extract;
- VAT certificate;
- Articles of Associations;
- An explanation of the economic activities of the company in Latvia/ Estonia;
- A bank identification document;
- If the company is appointing a local tax agent or Fiscal Representative, then a Letter of Authority or Power of Attorney is.
Tax representative
There is no need to appoint fiscal representative in order to handle all formalities related to VAT registration and filling.Keeping records
Records about performed transactions must be kept in order to check the correctness of tax returns and payments. The retention period for the records is 10 years.VAT payment date
The VAT due must be paid before the 20th day of the month following the period.Filing VAT returns
VAT return should be submitted on the following taxation period:One calendar month:
- To a registered taxpayer who has been registered in the SRS VAT payer Register during the taxation year and it shall be preserved for six calendar months;
- If the value of taxable transactions in the pre-taxation year or in the taxation year exceeds €50,000;
- If supplies of goods are carried out in the territory of the European Union (including the participation in supplies of goods referred to in Section 4, Art 16 of the VAT law) or if services are rendered to taxpayers of other Member States the place of supply of which is determined by Section 1, Art 19 of the VAT law;
- VAT group and fiscal representative.
One calendar quarter:
- To a registered taxpayer who has been registered in the SRS VAT payer Register during the taxation year if its value of taxable transactions does not exceed €50,000during the taxation year and if the taxpayer does not supply goods in the territory of the European Union and does not provide services to taxpayers of other Member States the place of supply of which is determined by Section 1, Art 19 of the VAT law;
- To a registered taxpayer whose value of taxable transactions in the pre-taxation year exceeds €14 228,72 but does not exceed €50,000, and who does not carry out supplies of goods in the territory of the European Union or does not render services to taxpayers of other Member States the place of supply of which is determined by Section 1, Art 19 of the VAT law.
E-invoicing Latvia
In April 2019, Latvia introduced Regulation No. 154 “Applicable e-invoicing standard and specification and procedure for the use of its main elements”. This regulation prescribes mandatory receipt of B2G e-invoices electronically. From April 2019, this obligation applies to Directly Administered Agencies and from April 2020 to other government departments and public service providers. All electronic B2G invoices issued in Latvia must comply with the Pan European Public Procurement On-Line (Peppol) system. The platform in Latvia for the electronic invoice communication is the eAddress. It is electronic communication and document processing environment. The use of this platform is mandatory for Latvian government authorities, but the platform is also suitable for private individuals. In addition to the eAddress platform, government purchasers can receive e-invoice via email. Mandatory electronic invoicing is planned to be introduced in Latvia:- from January 1, 2025 for B2G transactions;
- from January 1, 2026 for B2B.
Thresholds
The threshold for all EU- established businesses is €10,000. If a digital supplier stays below 10,000 selling cross-border per year, such seller can charge the VAT rate of the domestic country. As soon as such passes the annual sales limit, the seller is obliged to charge VAT rate of customer’s country. The threshold for non-EU businesses is zero. That means that non-EU supplier of digital services needs to register from the first B2C sale. Latvian businesses must register for VAT when revenue exceeds €40,000 for the period of the previous 12 months.Pieces of evidence
General EU conditions to determine the location of the buyer or user:- IP address;
- Shipping Address;
- Phone code +371;
- The location of the customer’s landline phone through which the service is provided;
- Address of the buyer of the service.
List of electronic services
An approximate, but not exhaustive, list of electronic services:- Website hosting;
- Software;
- Electronic images, text, and access to databases;
- Online games, including gambling;
- Downloadable and streaming music and films;
- Distance learning.
Registration procedure
When a company supplies electronic services to non-taxable persons, a such seller can choose to register for VAT, OSS, or non-union OSS. The time for VAT registration in Latvia depends on the type of registration. Non-union OSS registration takes around one week. And VAT registration from 3 weeks to 5 weeks. All documents need to be translated into Latvian.Marketplaces
When a non-EU company trades through a marketplace like Appstore or social media, such sellers don’t need to register for VAT in the EU country – it is a marketplace’s responsibility to calculate and remit VAT.Tax representative
There is no need to appoint a fiscal representative to handle all formalities related to VAT registration and filling.Keeping records
Records about performed transactions must be kept to check the correctness of tax returns and payments. The retention period for the records is 10 years.VAT payment date
The VAT payment dates entirely correspond with reporting deadlines.Filing VAT returns
The OSS deadline is the last day of the month after the end of reporting quarter. Standard VAT returns must be filed no later than the 20th day of the month following the quarter. This VAT return can only be filed electronically at the SRS electronic declaration system or EDS.E-invoicing Latvia
In April 2019, Latvia introduced Regulation No. 154 “Applicable e-invoicing standard and specification and procedure for the use of its main elements”. This regulation prescribes mandatory receipt of B2G e-invoices electronically. From April 2019, this obligation applies to Directly Administered Agencies and from April 2020 to other government departments and public service providers. All electronic B2G invoices issued in Latvia must comply with the Pan European Public Procurement On-Line (Peppol) system. The platform in Latvia for the electronic invoice communication is the eAddress. It is electronic communication and document processing environment. The use of this platform is mandatory for Latvian government authorities, but the platform is also suitable for private individuals. In addition to the eAddress platform, government purchasers can receive e-invoice via email. Mandatory electronic invoicing is planned to be introduced in Latvia:- from January 1, 2025 for B2G transactions;
- from January 1, 2026 for B2B.
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