Latvia joined the European Union in 2004. The country is also a member of the Schengen Area, but not the Eurozone, and trades in Lats.

VAT rates in Latvia

The standard rate of VAT is 21%, and a reduced rate of 12% is available.

VAT registration in Latvia

The VAT registration limit in Latvia for established businesses is LVL 35,000 and zero for non-established businesses.

Distance sales have a limit of LVL 24,000 for VAT registration.

The format for a VAT identification number is: LV 123456789 10 11. Every company must hold a number like this in order for accurate taxation.

VAT returns in Latvia are flexible and can be filed monthly, quarterly or bi-annually. Annual returns are not required although an annual statement may be requested if there are adjustments to input or output VAT, or taxable and exempt supplies.

Are there any Intrastat thresholds in Latvia?

Yes. There is a limit of LVL 100,000 for both dispatches and arrivals.

VAT recovery in Latvia

  • Is VAT recovery permitted for non-established non-EU businesses?

Yes, Latvia allows VAT recovery but only with countries that have a reciprocity agreement – currently only Norway and Switzerland.

  • Are there any non-VAT recoverable expenses?

Yes, recovery of input tax is restricted on certain items, i.e. business entertainment and car leases.

Reverse charge applies to the majority of cross border services. An extended charge applies to Latvian VAT registered customers supplied by a non-established business.

Requirements and regulations in Latvia

A company established in a non-EU member country may appoint a tax representative to register for VAT in Latvia.

Use and enjoyment rules apply to a range of services in Latvia.

The period of VAT recovery by tax authorities has a timescale of 3 years in order to prevent fraud.

Similarly, there is a period of 3 years for VAT deductions and refunds.

Please contact us for further information about paying taxes in Latvia, and a member of our team will be happy to help you.

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