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VAT Rates in Latvia

Updated Latvian VAT rate tables

The standard rate of Value Added Tax (VAT) in Latvia is 21%. The Latvian VAT Law, in Article 42, outlines two reduced rates: a first reduced rate of 12% and a second reduced rate of 5%. These reduced rates are applicable to specific products and services under certain circumstances and limitations.

Essential products like registered pharmaceuticals and infant food qualify for the First Reduced Rate, while fresh produce is typically subject to the Second Reduced Rate.

Read more regarding VAT rates in Latvia in our comprehensive guide below.

VAT Rates in Latvia

Standard VAT rate

Each country has a standard rate for Value-Added Tax (VAT), which is commonly applied to goods and services. This standard rate is applicable to most goods and services, although there are exceptions for essential items or specific goods and services that may qualify for a reduced rate. The reduced rate categories are listed below.

 

Rate Good or Services
21% All goods or services not included in the reduced rates table below

Reduced VAT rates

Certain goods and services are eligible for reduced VAT rates.  as essential items or other specific goods or services that may have a reduced rate and are presented below.
Rate Good or Services
12% “First Reduced Rate”
  Medicines and medical equipment that are registered
  Specialized baby products and food
  Transportation of passengers and their luggage within the country
  Accommodation for tourists
   Timber products used for heating purposes within the home
  Other forms of energy are used for domestic heating
5% “Second Reduced Rate”
  Starting from January 1st, 2022, printed and electronic publications such as newspapers are eligible for the Second Reduced Rate. Prior to this date, they were subject to the First Reduced Rate.
0% Zero rated products
  Exports of goods to destinations outside the European Union (EU).
  Supplies of goods that are in customs warehouses or free zones and have not been released for free circulation.
   Supplies of goods from other EU Member States that are in customs warehouses or free zones and have started export procedures.
  Supplies of goods between taxable persons in different EU Member States, known as intra-Community supplies.
  Sales of goods in tax-free shops to individuals who are travelling to destinations outside the EU.
  Sales of new vehicles to any person who is in a different EU Member State.
  Supplies of goods from a third country to a fiscal representative, provided that the goods are transported to the recipient in another EU Member State within 30 days of their import.
  Services that are directly related to the export of goods, such as transport, packaging, and handling
  Services that are provided in customs warehouses or free zones and are related to goods that have not been placed into free circulation.
  International transport of passengers and their baggage, including air, sea, and rail transport.
  Shipping services provided to ships that are used for international transport, as well as certain other services related to the operation of such ships.
  Sales of aircraft and aircraft parts that are used for international transportation.
  Various supplies of goods and services to diplomatic and consular missions, agents, and international and EU bodies and institutions, which are exempt from VAT.

Exempt From VAT

  Services provided by the Latvian post office for the delivery of mail and packages.
  Healthcare services provided by medical professionals, including doctors, nurses, and other healthcare workers
  Dental services provided by dental professionals, including check-ups, treatments, and procedures related to oral health.
  Social services that provide assistance and support to individuals and groups in need, such as welfare programs, rehabilitation services, and community outreach programs
  Supplies of goods and services provided by charitable organizations that aim to protect children’s rights, such as clothing, food, education, and healthcare services.
  Education services and related activities provided by schools, universities, and other educational institutions, such as teaching, research, and training programs
  Cultural events that are not primarily commercial in nature, such as exhibitions, festivals, and performances that promote cultural diversity and understanding.
  Payment made for the use or performance of an author’s work, such as royalties or licensing fees for books, music, or other creative works.
  Supply of gold, monetary, and banknote reserves to the Bank of Latvia to ensure the stability of the national currency and financial system.
  Insurance services provided by insurance companies to protect individuals and organizations against financial losses from unforeseen events or risks.
  Financial services provided by banks and other financial institutions, such as loans, deposits, and investment services.
  Services related to gambling, betting, and lotteries, including online platforms that provide these activities.
  Sale of real estate properties, with some exceptions
   Rental of residential properties to individuals for long-term use, excluding hotels and short-term rentals.

 

Various countries announced short-term adjustments to their VAT rates in response to COVID-19. This resulted in reductions to the VAT rates on products and services sold by businesses that were particularly hit hard by the pandemic’s economic fallout, such as the hospitality sector. To learn more about the implications of COVID-19 in Latvia, please visit our news section by clicking here. 

 

 

 

Last Updated: 13/10/2023

Disclaimer

The information provided by Global VAT Compliance B.V. on this webpage is intended for general informational purposes only. Global VAT Compliance B.V. is not responsible for the accuracy of the information on these pages, and cannot be held liable for claims or losses deriving from the use of this information. If you wish to receive VAT related information please contact our experts at support@gvc.tax

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