VAT – Value Added Tax is a consumption tax, which is included in the price of goods and services and is actually paid by the final consumer. The standard VAT rate in Latvia is 21%, but a reduced VAT rate is also set for specific groups of goods and services. A company, whether established in another EU Member State or in a non-EU country, becomes liable to register for VAT in Latvia under the Latvian VAT Law if certain conditions are met. Here we outline the most common scenarios.<\/p>\n\n\n\n
For Latvian companies the obligation for VAT registration is triggered when the total value of taxable supplies and certain exempt transactions exceeds 50000 EUR within a 12-month period<\/strong>. However, a one-off transaction that is not carried out as part of the company\u2019s economic activity may be treated as an exception and does not create a VAT registration requirement.<\/p>\n\n\n\n In the case of non-domestic businesses, VAT registration in Latvia is required where taxable supplies of goods or services are carried out in Latvia<\/strong>. This includes situations where:<\/p>\n\n\n\n VAT registration also<\/strong> is required:<\/p>\n\n\n\n In addition, a company should register for VAT when it receives electronic services from suppliers established in other EU Member States or in third countries, such as digital advertising or platform services provided by companies like Facebook or Instagram. Here it is important to note that since 2025 small local and EU businesses can apply for a special optional VAT regime. VAT will only have to be paid on received services or purchased goods and input tax cannot be deducted. The most important criteria for this scenario are:<\/p>\n\n\n\n\n
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