VAT in Latvia 2026 – Rates, Registration and Compliance Guide

Value Added Tax (VAT) in Latvia is a crucial element of the tax system that impacts both businesses and consumers. Latvia applies multiple VAT rates, including standard, reduced, and zero rates tailored to specific types of goods and services. This article covers the current VAT rates, registration rules, filing obligations, and Intrastat thresholds as they stand in 2026.

VAT Rates in Latvia

Latvia operates four VAT rates in 2026, with several important changes that took effect from January 2026 and July 2026.

1. Standard Rate — 21%

The standard VAT rate in Latvia is 21% and applies to most goods and services not covered by reduced rates. This is the most commonly used rate and covers a wide range of products and services, including most food products not listed under reduced rates.

2. First Reduced Rate — 12%

The 12% VAT rate applies to:

• Medicines and medical products, including those specialised for people with disabilities
• Baby food
• Hotel services
• District heating
• Fresh fruits, berries, and vegetables typical to Latvia — the 12% rate for these products became permanent from 1 January 2026
• From 1 July 2026 to 30 June 2027: a temporary 12% rate applies to a broader range of essential food products including all types of bread, fresh milk (excluding UHT), fresh chilled poultry meat, and fresh poultry eggs — normally subject to the standard 21% rate

3. Second Reduced Rate — 5%

The 5% reduced VAT rate applies to books and press publications. From 1 January 2026, this rate applies only to printed and online books, educational materials, maps, and subscription fees for printed and electronic media published in Latvian, Latgalian, Livonian, or the official languages of EU, EEA, OECD member states, Switzerland, and EU candidate countries. Publications in other languages — including Russian — are now subject to the standard 21% VAT rate.

4. Zero Rate — 0%

The zero VAT rate covers services related to intra-Community and international transport, facilitating trade and mobility within the European single market.

VAT Registration in Latvia

VAT registration in Latvia is required for businesses from other countries that:

• Import or export goods to or from Latvia
• Buy and sell goods within Latvia
• Provide services or sell goods from Latvia to private recipients in other EU countries
• Store goods in Latvia

For businesses from outside the EU, VAT registration requires appointing a tax representative in Latvia. Registration can be completed online, by email, in person at the tax office, or at the regional Business Register Office. Required documents include a registration application, a copy of the company’s articles of association, proof of registration in the commercial register, and evidence of business activities in Latvia.

VAT Declarations

VAT returns in Latvia must be submitted by the 20th day of the month following the reporting period. New taxpayers are required to submit monthly returns for the first six months. Quarterly returns can be filed if annual turnover does not exceed EUR 45,000. An annual VAT return is only required in specific cases, such as for financial services or annual corrections.

Reverse Charge Mechanism

In Latvia, the reverse charge mechanism is applied to intra-Community transactions and certain domestic transactions, such as the supply of construction goods and property-related services. The mechanism simplifies reporting and helps prevent VAT fraud.

VAT Refunds in Latvia

VAT refunds are available for businesses that make purchases related to their economic activities. This requires submitting electronic refund applications after filing VAT returns. The standard processing time for refunds is 30 days, although it may be extended if additional inquiries are made by the tax authorities.

Penalties for Non-Compliance

Penalty for Late VAT Registration

Businesses that fail to register for VAT within the required time may face a fine ranging from EUR 50 to EUR 350.

Penalty for Late VAT Payment

In case of delayed VAT payment, the taxpayer may be subject to a penalty of up to 30% of the unpaid amount. Additionally, interest for late payment is charged at 0.05% of the unpaid amount per day.

Intrastat Thresholds in Latvia

For 2026, Latvia has raised its Intrastat reporting thresholds:

• Arrivals (intra-EU acquisitions): €380,000 (increased from €350,000 in 2025)
• Dispatches (intra-EU supplies): €220,000 (increased from €200,000 in 2025)

Intrastat declarations must be submitted monthly by the 10th day of the month following the reporting period. If the deadline falls on a weekend or public holiday, it is moved to the next working day. If the threshold is exceeded during the year, businesses must begin submitting declarations from the month in which the threshold was crossed.

Summary

Understanding the current VAT rates, registration rules, filing obligations, and Intrastat thresholds is essential for any business operating in Latvia or working with Latvian partners. In 2026, Latvia has introduced several notable VAT changes — including a temporary reduction on essential foods, a permanent reduced rate on local fresh produce, and new language-based restrictions on the 5% rate for publications. Complying with tax regulations and filing returns on time helps avoid issues with the Latvian tax authorities and financial penalties. We encourage you to consult with our experts for tailored advice: Contact us — amavat®