There are some important considerations to be taken into account regarding the VAT reverse mechanism. The practice of Latvian State Revenue Service (SRS) has changed and the standard VAT arrangements cannot always be applied. It is required by the VAT Law for the buyer to determine whether the transaction is subject to reverse charge procedure or not. The SRS has the right to apply a penalty to the buyer for not following the correct VAT procedures.

Therefore, it is strongly recommended to examine carefully all transanctions that could be subject to VAT reverse charge mechanism and correct any errors if they are identified. It is also important to inform the supplier to correct the invoicing and refund VAT to the buyer.

For more information on the subject, please read the full article on our Latvian webpage: http://leinonen.lv/news/news-2017/vat-reverse-for-local-supplies-and-related-risks