VAT in Latvia guide

VAT rates

The term “taxable supplies” refers to supplies of goods and services that are subject to VAT.

In Latvia, the following rates of VAT apply:

• Standard rate: 21%
• Reduced rate: 12% and 5%
• Zero rate: (0%)

The standard rate of VAT applies to all supplies of goods or services, unless a specific measure provides for the reduced rate, the zero rate or an exemption. When an exemption is granted, there may be an option to tax.

Latvian VAT for digital service providers

In case of digital services, telecom services or broadcasting services supplied in a business-to-business (B2B) context, the place of supply is the place where the recipient is customer are established in Latvia.

In case of digital services, telecom services or broadcasting services supplied in a business – to consumer (B2C) context Latvian VAT is always due in case of supply to customers established in Latvia, disregarding whether the supplier is established inside or outside the EU. See the section on the “Mini-One-Stop-Shop” (MOSS) below for more information.

Mini One-Stop Shop

The optional simplification measure called the “Mini One-Stop Shop” (MOSS) with respect to digital services, telecommunication services and broadcasting services supplied in a B2C context. The supply of these services is generally considered as taking place in the Member State of the customer, not the Member State of the supplier.The MOSS scheme allows all taxable persons supplying digital services, telecommunication services or broadcasting services to nontaxable persons in EU Member States in which they do not have an establishment, to account for the VAT due on those supplies via a web portal in the Member State in which they are identified. The MOSS allows qualifying taxable persons to avoid registering in each Member State of consumption. The MOSS simplification is available both for taxable persons established in the EU and outside the EU. The MOSS generally mirrored the scheme that was in place for non-EU established suppliers of electronically supplied digital services, telecommunication services or broadcasting services supplied to final consumers. Persons already registered under the pre – existing scheme for electronically supplied digital services, telecommunication services or broadcasting services, should retain their existing individual VAT identification numbers for the purposes of the MOSS.

Late – registration penalties

No specific penalty applies to late registration. However, the following penalties may be assessed if VAT is not paid or if VAT returns are not filed as a result of late registration or non-registration:

• An administrative penalty in the amount of EUR210 to EUR350 may be imposed for non registration in the VAT taxable person’s register.
• A penalty may be imposed for undeclared VAT. In such circumstances, undeclared VAT must be paid, together with a penalty of up to 30% of the unpaid VAT and late payment fines of 0.05% per day.
• A penalty in the amount of 0.05% per day may be imposed for late VAT payments.