The value-added tax
is an indirect tax applied to the provision of goods and services. The VAT in Latvia
has different values, a standard one, and two reduced rates, along with several exemptions or zero-rated services.
Our agents who specialize in company formation in Latvia
can advise all investors, foreign and local, on the requirements for VAT registration and the types of businesses that are subject to this tax.
VAT obligations in Latvia
The value added tax is charged on the provision or supply of goods and/or services, on the intra-Community acquisition of goods and services and the import of these. As a member of the EU, Latvia observes the general directives and rules on the taxation of goods and services as well as handling intra-Community purchases.
The standard value-added tax rate in Latvia is 21%
, with two other reduced rates of 12% (for foodstuffs, pharmaceutical products, books but not e-books, newspapers, hotel accommodation, etc.) and 5% (for a selection of locally-sourced vegetables and fruits) and an exemption for services such as insurance or other financial services. Intra-community and international transport is zero-rated. One of our Latvia company formation agents
can give you more details in these exemptions.
VAT registration in Latvia
Companies that record a value of taxable supplies of over 40,000 EUR in a 12-month period are required to register for VAT purposes. This value does not include the imports and the registration for foreign companies doing business in the country becomes mandatory when the company records a taxable supply.
Companies will need to observe a set of requirements in regards to VAT in Latvia. The list below highlights some of the most important ones:
• registration: with the Latvian State Revenue Services, according to the applicable annual threshold;
• proof of VAT registration: for foreign companies that have been registered for VAT purposes in another EU member country.
• invoices: once registered, the company will need to issue invoices according to the provisions set forth in the Latvian VAT Act.
• accounts: the company will need to keep accounts of the transactions for at least ten years
Our agents who specialize in company formation in Latvia can give you more detailed information about the requirements for compliance with the VAT Act in the country.
for complete assistance for business formation.