Latvia has three VAT rates, and every company must apply the correct rate per invoice line. This guide covers each rate, which products/services it applies to, and how to avoid common mistakes in the VAT declaration.
The most common rate. Applies to industrial products, IT services, consulting, B2B sales, restaurant à la carte meals, motorcycles, alcohol, non-exempt services. Example: lawyer invoice of EUR 100,000 → EUR 121,000 gross, where EUR 21,000 is VAT remitted to VID. Applied since 2009, raised from previous 18 % during the crisis and not lowered back.
Applies to fresh food (meat, fish, fruit, vegetables, milk), baby food, lodging (hotels, guesthouses, AirBnB), books and learning materials, public transport (buses, trains), domestic flights, cremation services. Example: hotel in Old Riga — lodging 12 %, à la carte restaurant 21 %, breakfast as part of lodging 12 %.
Applies to prescription medicines, certain medical supplies (insulin pumps, glucose monitors), magazines and periodicals (with specific conditions on content share), district heating to households (seasonal). The narrowest rate, applied selectively. Example: pharmacy sells insulin for EUR 100 → EUR 105 gross (EUR 5 VAT).
The VAT declaration is filed monthly for all VAT payers in Latvia. Deadline: by the 20th of the following month. Quarterly filing is allowed only for small payers with annual turnover below EUR 100,000. VAT registration threshold: EUR 50,000 annual turnover (since 2024). Late filing: EUR 50–280 penalty + 0.05 % per day late penalty on the outstanding amount.
Talk to us about how the 4b2b ecosystem fits into your existing EDS flow. We have implementations from 10-employee firms to Nasdaq Riga companies.
