Country Guide: Latvia
Looking to expand your e-commerce business to Latvia, then look no further, here is AVASK's guide to VAT in Latvia:
Country Profile: Latvia
Latvian E-commerce facts:
|Number of e-commerce users:||1.2 million
|Revenue in e-commerce market:||£301 million|
|Estimated market growth:||6.1% to £382 million by 2024|
Latvian thresholds and additional summary:
|Distance Selling Threshold (DST)||€35,000|
|VAT number format:||LV 12345678901|
|VAT return period:
||Monthly or quarterly.|
|VAT return deadline||20th of the month following period end.|
|Annual VAT filing deadline:||Not generally required - can be required under some conditions. Contact us for information.|
|EC sales lists reporting||Monthly or quarterly, depending on VAT return frequency.|
VAT in Latvia
Latvia is a member of the European Union (EU) and draws up its tax rules according to the laws or directives issued from Brussels by the EU. The current VAT directive applies to all 27 member states of the European Union, and it governs the rules on VAT compliance, and in some part, covers the setting of VAT rates.
As an EU member state, Latvia is obliged to implement the VAT directives, which provides guidance on VAT. Where there is a conflict, the European Union’s directive takes precedence. Latvia is a member of the European single market economy and uses the Euro (€) for its currency. In Latvia VAT is known as: Pievienotās vērtības nodoklis, or PVN.
VAT registration in Latvia
Both EU and non-EU businesses may trade in Latvia without establishing a local presence. This is known as non-resident VAT trading. There is no VAT threshold in Latvia for the registration of non-resident traders, but you will need one to record transactions and your Latvian customers will want proof that you have obtained one.
There are strict rules on the situations where VAT registration is permitted. Common scenarios that require Latvia VAT registration include:
- Importing goods into Latvia;
- Organising live events, conferences, etc. in Latvia;
- Holding goods in a warehouse in Latvia as stock for resale;
- Buying goods within Latvia that are subsequently re-sold in-country;
- Selling goods from Latvia to other EU member states;
- Distance-selling to private individuals in Latvia, e.g. internet retailing or trading through an e-commerce platform.
Registering for Latvia VAT generally takes around a week once all documentation has been submitted to the tax authority, but this varies from seller to seller and will depend on the specifics of an individual company.
Latvian VAT compliance
There are detailed rules controlling the recording and processing of Latvian transactions for VAT purposes. This includes guidelines on:
- Latvian invoice requirements;
- When to issue a Latvian tax invoice;
- Foreign currency reporting;
- Credit notes and corrections;
- Correcting entries from prior returns;
- Which accounting records must be maintained.
(Name) VAT rates
|VAT Rate||% Rate|