Latvia Sales Tax VAT

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The standard rate of VAT in Latvia is 21% with reduced rates of 12% and 0%

The standard rate of VAT in Latvia is 21% withreduced rates of 12% and 0%

  • The rules in Latvia are somewhat different from other EU countries
  • VAT is charged on assets and services provided in Latvia as well as on imports into Latvia.
  • Exports from Latvia are not subject to value added tax.
  • Income from financial services, such as insurance and banking services are exempt from VAT and legal advice, subject to the conditions in law, is exempt from VAT.
  • Any business with a turnover in excess of LVL 35,000 in the previous 12 months is obligated to register with the VAT authorities.
  • VAT at the rate of 12% is payable on medications, veterinary medications, special equipment for children and communications services.
  • The following operations are exempt from VAT, subject to the definitions:
      – Educational services.
      – Medical services.
      – Cultural services.
      – Lotteries and gambling.
      – Financial services provided by banks and insurance companies.
      – Gifts and donations for humanitarian aims.

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 registration 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.

If you wish to apply for Sales Tax in Latvia, please register in the form below the reasons for needing sales tax VAT in Latvia or send us an email.