Latvia VAT Rules

Exemptions

E-learning activities:

According to Latvian VAT Law, a VAT exemption applicable to educational activities is applicable to:

1. pre-school educational institutions which provide children supervision and pre-school educational services;
2. state eligible educational institution services of general, professional, higher and interest education fields as well as for services which are closely connected with the provision of those educational services;
3. educational services which are supplied to institutions mentioned in (2) by foreign educational institutions;
4. educational services which are rendered by teachers, such as rendering private lessons within the framework of general, professional and higher education programs; and
5. professional training or re-qualifying services for unemployed persons which are organized by State Employment Agency.

Reference to the above may be found in Article 52 of the Latvian VAT Law. However, there is no specific reference or official guidance in the Latvian VAT legislation regarding the supply of e-learning services or other Relevant Services in the area of e-education. Each transaction has to be analysed on a case by case basis.

Gambling activities:

According to Latvian VAT Law, a VAT exemption is applicable to gambling and lottery (include e-gambling) related activities for taxpayers who have rights to create casinos' and gambling halls and to organize lotteries.

However, such exemption does not extend to gambling activity related services, such as goods and services supplies or catering entities and slot machine (adult or children) purchases and maintenance services.

Reference to the above may be found in Article 52 of the Latvian VAT Law and Cabinet Regulations No.17 Articles 49; 50; 51.

General:

There are no further exemptions in the Latvian VAT legislation under which the supply of telecommunications, broadcasting and electronic services provided to non-VAT taxable persons may fall.

Invoicing

VAT returns

Formalities in the submission of the VAT return

VAT returns in Latvia must be submitted through the Electronic Declaration System (EDS), which is available at - https://eds.vid.gov.lv/login/#. More information - https://www.vid.gov.lv/en/electronic-declaration-system-eds.

Corrections to returns after the three-year period

General approach to corrections beyond the standard period

In Latvia, corrections to VAT returns after the expiry of the three-year period are permitted only in exceptional cases - in respect of the payment of taxes due into the State budget, the default on the payment term may be reinstated by the Director General of the State Revenue Service if the taxpayer has submitted an submission for the payment of the tax not paid within the time period.

Payment modalities and deadlines

Payment modalities and deadlines in Latvia (MSID)

When Latvia acts as the Member State of Identification (MSID) under the One Stop Shop (OSS) and Import One Stop Shop (IOSS) schemes, taxable persons must follow the national rules for VAT payment. Below is an overview of the payment modalities, deadlines, and specific requirements.

• Taxable persons registered under OSS/IOSS in Latvia can make VAT payments exclusively via cashless transactions:
  • Bank transfer to the State Treasury account indicated by the State Revenue Service
  • Payments are made through the Unified Tax Account, which is mandatory for all taxpayers in Latvia
  • Transfers must be initiated electronically via internet banking or accounting systems.
• Specific National Rules
  • Payment Reference: A structured reference number must be used (e.g. LV/LVXXXXXX/QX.YYYY).
  • Bank Account: Payments must be made to the Unified Tax Account
  • Currency: All payments must be made in EUR.
  • Deadlines:
    • OSS: VAT returns are submitted quarterly, and payment must be made by the end of the month following the reporting quarter (e.g., Q1 return due by 30 April).
    • IOSS: VAT returns are submitted monthly, and payment must be made by the end of the month following the reporting month.
  • Late Payment Consequences: Interest and penalties may apply for overdue payments according to Latvian tax legislation.
• Detailed guidance on OSS/IOSS VAT returns and payment procedures is available on the official website of the State Revenue Service:
• Special VAT Scheme (OSS/IOSS)
• VAT Special Scheme Declaration
• Accounts for Tax and Fee Payments

Additional payment-related procedures in Latvia (MSCON)

When Latvia acts as the Member State of Consumption (MSCON) under the OSS/IOSS schemes, the following rules apply regarding payment deadlines, interpretation, and facilitation measures.

Applicable payment deadline and interpretation

• Deadline: VAT payments must be credited to the Unified Tax Account account by the due date.
• Timeliness: Under Latvian law, a payment is considered timely only when the amount is received and booked in the tax authority’s account by the due date, not when the payment is initiated.
• Important Note: If the payment is initiated on the due date but credited later (e.g., due to bank processing times or holidays), it will be treated as late, and penalties may apply.
• Recommendation: Taxable persons should initiate payments several days in advance, taking into account:
  • Cross-border bank processing times
  • National or regional holidays that may delay processing of the payment.

Late Payment Penalties

• Interest: For overdue VAT, Latvia applies a late payment interest of 0.05% per day on the outstanding amount, starting from the day after the deadline until full payment is received. The calculation of late payment interest is suspended if the amount of late payment interest reaches two-fifths of the amount of the overdue payment (principal debt).
• Legal Basis: Law “On Taxes and Fees” and Value Added Tax Law govern these rules.
• Value Added Tax Law
• Law “On Taxes and Fees”

Payment facilitation and support for arrears

Latvia offers formal options for taxpayers facing financial difficulties:

• Payment Deferral or Instalments: Taxpayers may apply to the State Revenue Service of the Republic of Latvia for a payment schedule or deferral under the Law “On Taxes and Fees”.
• Debt Relief Programs: Special support measures allow for partial cancellation of late payment interest and penalties if the principal tax debt is settled within a specified period.

Reimbursements

As a Member State of consumption, do you require an additional claim before making a reimbursement?:

No

Reimbursement threshold as Member State of consumption:

No threshold

Release from payment of insignificant amounts of VAT:

The recovery of overdue tax payments shall not be initiated if the total amount of the debt to be recovered is less than the costs of the tax administration related to making a decision on the recovery of overdue tax payments and initiating recovery.

Refund of deductible VAT by non-EU established trader

A taxable person not established in the EU but registered under OSS/IOSS may claim input VAT incurred in the EU under Directive 86/560/EEC (13th Directive). Detailed information is available at - https://www.vid.gov.lv/en/vat-refund-legal-persons-registered-third-countries.

Penalties for non-compliance (as Member State of consumption)

Failure to register and late registration:

The non-registration penalty clause is between ten and seventy units of fine (in addition to other potential penalties for non-compliance with other requirements e.g. obligations to pay VAT).
According with Article 16 of Law on Administrative Liability one unit of fine shall be EUR 5.
Reference to the above may be found in the Law On Taxes and Duties under Article 136.

Incomplete and incorrect VAT returns:

Penalties may be imposed for non-declared VAT. In such case, the undeclared VAT must be paid, together with a penalty of up to 30% of the unpaid VAT amount along with a late payment fee of 0.05% of the unpaid amount per day and the penalty clause for a natural person or a member of the board is between twenty-eight and four hundred units of fine.
According with Article 16 of Law on Administrative Liability one unit of fine shall be EUR 5.
Reference to the above may be found in the Latvian VAT Law under Article 146 and in the Law On Taxes and Duties under Articles 29 and 32.

Non-compliance with invoicing and accounting obligations:

For non-compliance with general accounting provisions, a penalty clause is up to four hundred fine units.
According with Article 16 of Law on Administrative Liability one unit of fine shall be EUR 5.
Reference to the above may be found in the Law On Accounting under Article 19.

Non-payment and late payment of VAT:

For non-payment of VAT, a penalty of up to 30% of the unpaid amount may be imposed as well as late-payment interest at 0.05% of the unpaid VAT per day.

For late-payment of VAT, a late penalty of 0.05% of the unpaid VAT amount per day may be imposed.

Reference to the above may be found in the Law on Taxes and Duties under Articles 29 and 32.

Non-submission and late submission of VAT returns:

For non-submission of a VAT return, a penalty clause is between fifty-seven and one hundred forty units of fine.
For late submissions of a VAT return, a penalty clause is between five and fourteen units of fine (3 - 10 days late) or between fifteen and thirty units of fine (11 - 20 days late) or between thirty-one and 
fifty-six units of fine (21 - 30 days later) or between fifty-seven and one hundred forty units of fine (more than 30 days late).
According with Article 16 of Law on Administrative Liability one unit of fine shall be EUR 5.
Reference to the above may be found in the Law On Taxes and Duties under Article 141.

Time of supply – chargeability

Deferment and Cash Accounting Scheme:

Latvia has not implemented provisions provided for in Article 66 of the VAT Directive for telecommunications, broadcasting and electronic services provided under the MOSS. The general rules should therefore apply.

Reference to the above may be found in the Latvian VAT Law in Article 137.

Continuous supplies:

In Latvia, continuous supplies of services subject to Latvian VAT that do not give rise to successive payments are deemed to be completed at intervals of at least 6 months. Continues supplies of services for which VAT is payable by the customer (pursuant to Article 196 of VAT Directive) that do not give rise to successive payments are deemed to be completed at intervals of at least 12 months.

Reference to the above may be found in the Latvian VAT Law in Article 32.

Reminder Messages

Reminder messages in Latvia (MSID and MSCON)

Latvia, acting as Member State of Identification (MSID) and Member State of Consumption (MSCON) under the OSS/IOSS schemes, uses the following reminder systems and security measures to ensure compliance and protect taxpayers from fraudulent messages. This should include:

Communication Channels

• (MSID) Electronic notifications are sent exclusively via:
  • The Electronic Declaration System (EDS)
  • Informative e-mails notifying taxpayers that a new message is available in EDS. These e-mails never contain payment links or attachments and only include a secure link to EDS.

Official Sender Information

E-mail notifications are sent from the official domain: robotsvid [dot] gov [dot] lv (robots[at]vid[dot]gov[dot]lv) to the e-mail address indicated in Taxpayers’ registration form.

Latvia does not send SMS or other instant messages. Any such communication should be considered fraudulent.

Fraud Prevention Tips:

SRS never requests sensitive data or payment confirmation via e-mail.

Any message containing direct payment links or QR codes is fraudulent.

Official Bank Account for OSS/IOSS Payments

All OSS/IOSS VAT payments must be made to the Unified Tax Account:

Beneficiary: State budget (State Revenue Service)

Beneficiary registration number: 90000010008

Bank account: LV33TREL1060000300000

Bank name: Valsts kase

SWIFT Code/BIC: TRELLV22

Contact Information for Verification

If in doubt about the authenticity of a reminder message, contact the State Revenue Service directly:

Phone: +371 67120000

E-mail: vidvid [dot] gov [dot] lv (vid[at]vid[dot]gov[dot]lv) or lnmad_mossvid [dot] gov [dot] lv (lnmad_moss[at]vid[dot]gov[dot]lv)

Official website: https://www.vid.gov.lv

Full contact details: SRS Contacts

Exclusion and Appeals

Exclusion and appeals in Latvia (OSS/IOSS)

Latvia provides formal remedies under national law for taxable persons affected by exclusion from the OSS/IOSS schemes or other related decisions. Below is an overview of the appeal procedures, timelines, and official language requirements.

Appeal Procedures

Under Latvian law, decisions by the State Revenue Service regarding OSS/IOSS registration, exclusion, or related obligations can be challenged through the following steps:

• Internal Review (Administrative Appeal)

Decisions may be contested within one month from the date of notification by submitting a written application to the SRS or its superior authority, in accordance with the Administrative Procedure Law.

• Judicial Appeal

If the internal review does not resolve the issue, the decision can be appealed to the Administrative District Court (first instance), followed by the Administrative Regional Court (appeal instance), and ultimately the Supreme Court (Senate) for cassation.

• Legal Basis
• Administrative Procedure Law
• Law on Taxes and Fees
• Value Added Tax Law

Official Language

All OSS/IOSS-related procedures, including appeals, are conducted in Latvian, the official language of the Republic of Latvia.

Documents submitted in other languages must be accompanied by a certified translation into Latvian.

Contact Point for Appeals

For questions or to submit an appeal:

State Revenue Service (VID)

Address: Talejas iela 1, Rīga, LV-1978

Phone: +371 67120000

E-mail: vidvid [dot] gov [dot] lv (vid[at]vid[dot]gov[dot]lv)

Official website: https://www.vid.gov.lv

Full contact details: Contacts of the Authority

Steps after exclusion/de-registration

If a taxable person ceases to use the OSS/IOSS in Latvia as MSCON, but still making supplies, it must register as a VAT payer in Latvia. Detailed information is available at - https://www.vid.gov.lv/en/registration-vat-payer-another-eu-member-state and https://www.vid.gov.lv/en/registration-vat-payer-third-country-or-third-territory.