Latvia VAT Calculator
1. Overview of Latvia VAT
Latvia has a standard VAT rate of 21%. Reduced rates of 12% and 5% apply to specific goods and services, such as certain food items, agricultural supplies, medical devices, and baby food. As of 1 July 2026, a one-year pilot project will reduce VAT on bread, milk, poultry meat, and eggs to 12%.
The 12% reduced rate applies to items like specific food products, agricultural supplies, and accommodation services. The 5% rate applies to certain medical devices, baby food, and some pharmaceutical products. Always check the latest official guidelines for the exact list of applicable goods and services.
The State Revenue Service (Valsts ieņēmumu dienests – VID) manages all VAT registrations, filings, and audits in Latvia. The VAT Law aligns with the EU VAT Directive. Non-EU companies providing digital services to Latvian consumers may need to register for VAT immediately or use the OSS scheme.
2. VAT Registration Threshold & Obligations
For Latvian-established businesses, VAT registration is mandatory once the annual taxable turnover exceeds €50,000 in a calendar year. Businesses below this threshold are not required to register but may do so voluntarily. If the threshold is exceeded by no more than €5,000, registration can be deferred until the end of the calendar year.
Non-resident businesses (including EU and third-country entities) generally have no registration threshold and must register from the first taxable supply in Latvia.
- Charge VAT on all taxable supplies (21%, 12%, or 5%).
- File VAT returns monthly or quarterly (depending on turnover and risk profile).
- Submit recapitulative statements (EC Sales List) for intra-Community supplies.
- Keep digital records for 7 years.
- For B2G transactions, e-invoicing is already mandatory; B2B e-invoicing is expected by 1 January 2028.
3. How to Register for VAT in Latvia (Step by Step)
- Access VID e-services portal – Visit the State Revenue Service website (vid.gov.lv) and log in using the Electronic Declaration System (EDS).
- Submit registration application – Complete the VAT registration application. You’ll need your company registration number, legal entity details, and a description of your business activities.
- Provide supporting documentation – For non-resident applicants, additional documents such as a power of attorney for a fiscal representative (if required) and proof of taxable activities in Latvia may be needed.
- Receive VAT number – VID issues a Latvian VAT number (format: LV + 11 digits, e.g., LV12345678901). Processing times vary based on application completeness.
- Set up e-invoicing (if applicable) – For B2G transactions, e-invoicing is mandatory. For B2B, compliance is expected by 1 January 2028.
Important: Foreign businesses must register before starting taxable activities. Late registration may result in penalties and backdated VAT assessments. A fiscal representative may be required for non-EU businesses.
4. VAT Filing Deadlines & Penalties
VAT returns in Latvia are generally filed monthly or quarterly, depending on the taxpayer’s turnover and risk profile as assigned by VID. The filing deadline is the 20th day of the month following the reporting period. VAT payment is due on the same date.
| Reporting Period | Filing Deadline |
|---|---|
| January (monthly) | February 20 |
| February (monthly) | March 20 |
| Q1 (Jan–Mar) for quarterly filers | April 20 |
| ... (subsequent periods) | 20th of next month |
Penalties: Late filing incurs administrative fines, and any unpaid VAT accrues late‑payment interest. Fines can reach up to €14,000 for serious non-compliance, and in extreme cases, VID may remove the taxpayer from the VAT register. For underdeclared VAT, the penalty is 20% of the underdeclared amount if the discrepancy exceeds 15% of the correct VAT due.
5. Special Rules: Reverse Charge & E-invoicing
Reverse Charge Mechanism: The reverse charge procedure applies to specific categories of goods and services defined in the VAT Law. Under this mechanism, the recipient of the supply accounts for the VAT, shifting the liability from the supplier. This is commonly used for certain domestic B2B transactions and intra-Community supplies.
E-invoicing: As of 1 January 2025, e-invoicing is mandatory for B2G (business-to-government) transactions. The initially planned B2B e-invoicing mandate for 2026 has been postponed; it is now expected to become mandatory from 1 January 2028.
Important: For reverse charge transactions, the supplier must clearly state on the invoice that the reverse charge applies. Failure to do so may lead to incorrect VAT accounting and potential penalties.
6. Other Tax Obligations in Latvia (2026)
Beyond VAT, businesses and employers in Latvia must comply with several other taxes and contributions. Below is a summary of the key rates and rules for 2026.
Corporate Income Tax (CIT)
Under the standard regime, the CIT rate is 20%, applied to distributed profits (dividends). An alternative voluntary regime exists for companies whose shareholders are all natural persons: they may choose to pay 15% CIT at the company level plus 6% personal income tax withheld on dividends paid to individuals. This alternative applies from 1 January 2026.
Withholding Income Tax (Personal Income Tax)
The standard rate for withholding income tax on employment income is 22%. A progressive rate applies to annual income above certain thresholds (e.g., 20% on income below 36 SAMS, 25% on income exceeding 36 SAMS up to 60 SAMS).
Social Security Contributions (VSAOI)
The total mandatory state social insurance contribution (VSAOI) rate is 34.09% of the employee’s gross salary. This rate is shared between employer and employee. The minimum monthly contribution base for 2026 is €780, with a minimum quarterly base of €2,340.
Micro-enterprise Tax
Latvia offers a micro-enterprise tax regime for very small businesses. The tax rate ranges from 15% to 25% of turnover, depending on annual revenue, and replaces CIT, PIT, and social security contributions for eligible entities.
Cash-Based Accounting (Important for Small Businesses)
Small businesses with annual turnover below the VAT registration threshold may use cash-based accounting for VAT purposes, meaning VAT is accounted for when payment is received or made, rather than when the invoice is issued. This can improve cash flow for eligible businesses.
7. Useful Links & Official Resources
8. Frequently Asked Questions (SSS)
Q: What is the VAT registration threshold for foreign businesses in Latvia?
A: There is no threshold for non-resident businesses. They must register for VAT from the first taxable supply made in Latvia.
Q: Can I use the VAT calculator above for reduced rates?
A: Yes, the calculator includes options for both the standard 21% rate and the reduced 12% and 5% rates. Simply select the appropriate rate from the dropdown menu.
Q: Do I need to charge VAT when selling to another EU country?
A: If the buyer has a valid VAT number, you can apply reverse charge (0% VAT). Always verify their VAT number using our VAT Validator.
Q: How do I verify a Latvian VAT number?
A: Latvian VAT numbers follow the format LV + 11 digits. You can verify them using the VIES system or our on-site VAT Validator.
Q: What is the deadline for submitting a VAT return in Latvia?
A: VAT returns are generally due by the 20th day of the month following the end of the reporting period (monthly or quarterly).
