Value Added Tax (VAT) is a consumption tax, which is included in the price of goods and services and is paid by the final consumer. The standard VAT rate is 21%, but a reduced VAT rate is also set for specific groups of goods and services.
Before performing or receiving VAT-taxable transactions, taxpayers must register with SRS https://www6.vid.gov.lv/PVN [1].
Submit documents for registration in the SRS VAT register:
• Electronically, using the SRS Electronic Declaration System (EDS)
• By e-mail at vid [at] vid.gov.lv using an electronic signature
• In person at any SRS client service centre (with proper ID)
• At any regional Register of Enterprises office.
Inland (local) taxpayers – application for registration in the SRS VAT payer register Application for registration in the SRS VAT payer register [2] *
Taxpayers of another member state, third country or third territory - Application of Taxpayers of another Member State and of a Third Country or Third Territory for Registration in the SRS VAT Payer Register [3]*if the application is signed by an authorised person, then the written power of attorney must be submitted together with the application.
The VAT Law defines general and VAT “reverse” payment arrangements for transactions carried out between locally registered taxpayers.
General application of VAT
1. Suppliers/providers of goods or services must issue a VAT receipt to recipients of goods or services indicating:
Suppliers/providers must enter the transaction value and estimated amount of VAT payable to the state in the taxpayer’s VAT return.
2. Recipients of goods/services:
If goods/services purchased are intended to be used for taxable business transactions, the amount of VAT indicated on the invoice must be included in the VAT return as deductible input tax. If goods/services received are not intended to be used for taxable business transactions, the VAT paid must be included in the VAT return as a non-deductible input tax.
Recipients of goods/services may also be exempt from VAT payment but do not have the right to deduct input tax.
Reverse VAT payment procedure
VAT “reverse” payment procedure applies to categories of goods or services specified in the Value Added Tax Law, if the supplier of goods/provider of services and the recipient of goods/services are registered VAT payers and the transaction has been carried out in Latvia.
Reverse VAT procedures apply for supplies and services:
There are also two specific payment arrangements for VAT:
Exclusion from the SRS register of VAT payers takes place:
Upon the initiative of the taxpayer
Automatically
A registered taxpayer is automatically excluded from the VAT register when the period for which s/he has previously registered has expired.
Upon the initiative of SRS
SRS excludes a taxpayer from the VAT payer register if any of the circumstances specified in Section 73 of the VAT Law occurs.