VAT in Latvia

1. What is the VAT in Latvia?

VAT is charged in Latvia on all supplies of goods, intra-community acquisitions and imports. The standard VAT rate is 22% since 2011. A reduced rate of 12% applies to some goods and services. For instance, accommodation or newspapers benefit from this reduced VAT rate in Latvia. Some services such as financial or insurance services are either zero-rated or exempt from VAT in Latvia.

2. How can I get a VAT refund in Latvia?

VAT refund in Latvia consists in redirecting the amount of money to the next taxation period. This happens until the end of the taxation year. In order for this amount of money to be redirected, the company’s owner must submit an application form with the State Revenue Service. The application will be checked and if it is accepted, the money is going to be redirected to the next period for VAT in Latvia.

3. How can I register for VAT in Latvia?

Limited liability companies and joint stock corporations that are registered in Latvia must also register for VAT purposes. VAT registration in Latvia starts with the submission of an application to the Register of Enterprises of the Republic of Latvia. The procedure is completed when a VAT registration certificate is issued for the company. The VAT registration in Latvia should not take longer than 15 working days. It is the same for foreign entities that must register for VAT in Latvia on the day the first supply is made. For all other cases, only if the annual turnover exceeds 35,000 LVL is the person taxable.

4. How does intra-community VAT work in Latvia? 

All member states of the European Union are known as “community territory” and when it comes to taxes, special rules apply in this area. Supply of goods and services made by a taxable person in Latvia and taking place on the territory of Latvia are subject to VAT. The VAT law in Latvia actually states that if a supplier in Latvia wants to make supplies to another EU member state, this transaction is considered intra-community supply and VAT is not charged in Latvia.

BridgeWest offers advice on how to open a company in Latvia, including virtual office and other related services.