VAT registration in Latvia — when to register and how to do it
Value Added Tax (VAT) is a consumption tax applied to the added value of goods and services. A company that is a VAT taxpayer collects VAT from its customers and pays it to the state budget, while at the same time recovering VAT that it has paid on its own purchases.
Registration in the VAT register can be:
Mandatory — if the company’s value of taxable transactions exceeds a certain threshold
Voluntary — if the company chooses to register in order to recover input tax or enhance its credibility
The €50,000 threshold — how to calculate it correctly
From 1 January 2025, the mandatory VAT registration threshold of €50,000 is calculated per calendar year. This means that an entrepreneur must monitor their turnover in a given calendar year. If the €50,000 threshold was exceeded in the previous calendar year, the taxpayer is required to register in the VAT register in the current calendar year. The registration application must be submitted by 30 November of the calendar year.
Included in the threshold:
VAT-taxable supplies of goods and services in Latvia
VAT-exempt transactions under Article 52(1)(20), (21), (22), (24), (25) and (26) of the VAT Law (e.g., real estate transactions, financial and insurance services), unless they are of an occasional nature and clearly differ from the type of economic activity
Not included in the threshold:
Sale of fixed assets and intangible investments
VAT-exempt transactions under Article 52(1)(20), (21), (22), (24), (25) and (26) of the VAT Law, if they are not of an occasional nature and do not clearly differ from the type of economic activity
What happens if you miss the registration deadline
If an entrepreneur fails to register in the VAT register on time, the State Revenue Service (VID) can impose VAT payment retroactively. In addition, an administrative fine may be applied.
Small excess exception
If the threshold in the previous calendar year was exceeded by no more than €5,000 (i.e., the total transaction value does not exceed €55,000), the company may postpone registration until the beginning of the next calendar year, provided the threshold was not exceeded in the previous calendar year. The application must be submitted by 30 November of the current year.
Special VAT registration procedure for small businesses
From 1 July 2025, small entrepreneurs and economic operators who meet certain criteria can apply for and use a special registration procedure in the VID VAT register. Persons registered under this procedure pay VAT only in certain cases — for received services and/or purchased goods (for example, for services from the EU) — but do not have to pay VAT on their revenue from the sale of services or goods in Latvia.
Criteria:
the total value of supplies of goods and services (turnover) in the territory of the Republic of Latvia in the previous and current calendar year does not exceed €50,000
no services are supplied for which the place of supply is determined by Article 19(1) of the VAT Law to VAT-registered taxpayers of other European Union (EU) member states
Voluntary registration — when is it beneficial?
Any company can register as a VAT taxpayer regardless of its turnover. Voluntary registration can be beneficial if the company wishes to recover input tax on its purchases, as well as to strengthen credibility in the B2B market, because transaction partners can deduct input tax on the services or goods received.
The downside is the administrative burden: monthly or quarterly VAT returns, strict invoicing requirements and detailed record‑keeping.
VAT rates in 2026
Four VAT rates apply in Latvia:
Rate | Applies to |
|---|---|
21% | Most goods and services: consulting, IT, retail, restaurants, professional services |
12% | Reduced rate: fresh fruits, berries and vegetables (pilot project), fresh poultry meat, eggs, fresh milk, bread, heating supplies, books (physical form), pharmaceutical products and passenger transport |
5% | Reduced rate: books (digital), press publications, medical devices, certain special publications |
0% | Export of goods, intra‑Community supplies of goods to EU‑registered customers, international transport, certain supplies related to ships and aircraft in international traffic |
VAT exemptions:
Certain financial and insurance services
Healthcare and medical services
Education and professional training
Certain cultural and social services
Residential property rental
Exempt transactions do not generate output VAT and generally do not allow recovery of input VAT related to these activities.
How to register — step by step via EDS
Registration in the VAT register is done electronically in the VID Electronic Declaration System (EDS).
Log in to eds.vid.gov.lv with your e‑identity (eID, eParaksts, Smart‑ID or internet banking authentication).
Select the section "Registration" → "VAT taxpayer registration application".
Fill in the form.
The VID reviews the application and assigns a VAT registration number in the format LV + 11 digits. Processing usually takes 3–5 working days.
After registration, the company’s data becomes publicly available in the VIES (VAT Information Exchange System) database, where partners can check the validity of the VAT number.
Special rules for foreign companies
For foreign companies carrying out VAT‑taxable transactions in Latvia, the VAT registration threshold does not apply — registration is usually required from the first taxable transaction. In addition, companies from countries outside the EU generally have to appoint a fiscal representative in Latvia. Exceptions are possible in certain cases, for example by using the special OSS scheme.
What changes after VAT registration
VAT amount must be shown on invoices. Every invoice must comply with legal requirements: it must include the VAT number, the VAT amount shown separately and the applicable VAT rate.
VAT returns must be submitted. VAT‑registered companies in Latvia must submit VAT returns regularly. The frequency of submission depends on turnover. The default for most VAT‑registered companies is monthly. Companies with an annual taxable turnover not exceeding €40,000 may submit returns quarterly.
VAT return deadline: by the 20th of the following month (for monthly returns) or by the 23rd of the following month (for quarterly returns).
EC Sales Lists must be submitted. If you carry out transactions with EU partners, you must submit EC Sales Lists.
Frequently asked questions
Can I register as a VAT taxpayer if my turnover is below €50,000?
Yes, voluntary registration is possible for any company. However, carefully consider whether the benefits (recovery of input tax) outweigh the additional administrative burden.
How long does the VID take to process a VAT registration application?
Usually 3–5 working days, but in more complex cases or if additional information is requested — up to 15 working days.
Can the VAT status be cancelled?
Yes, the VAT status can be cancelled if the company no longer meets the mandatory registration criteria. However, for companies that registered voluntarily, cancellation is only possible after a certain period (usually after one year), subject to the conditions set out in the law. The application must be submitted via EDS.
Does the VAT registration threshold also apply to self‑employed persons?
Yes, the threshold applies to self‑employed persons as well. All taxable transactions are included in the calculation.
What happens if I mistakenly omit VAT on an invoice?
If you are a VAT taxpayer but have not indicated VAT on an invoice, you are in any case liable to pay the VAT — even if the customer has not paid it.
VAT registration may seem like a bureaucratic procedure, but a properly evaluated and timely step can save both money and headaches. Our team helps entrepreneurs assess whether voluntary registration is beneficial, as well as prepares and submits applications via the EDS system.
Last updated: April 2026. Information is based on the Value Added Tax Law and official materials of the State Revenue Service (VID).
Comments