If you’re embarking on entrepreneurial endeavors in Latvia or conducting business within the European Union, understanding the intricacies of Value Added Tax (VAT) registration is pivotal. Latvia, like other EU countries, adheres to the EU VAT Directive, shaping its VAT regulations. In this article, we’ll delve into the essentials of VAT registration in Latvia and how Breicis.com can assist your business in navigating this crucial aspect of financial compliance.
The Basics of VAT Registration in Latvia
VAT registration in Latvia is mandatory for various entities, including individuals, legal entities, partnerships, authorized individuals involved in joint economic activities, VAT groups, and fiscal representatives. Businesses must register as VAT payers before engaging in taxable transactions. This encompasses:
- Carrying out taxable transactions within Latvia.
- Receiving services within Latvia, with the place of supply determined in accordance with Article 19(1) of the VAT Act.
- Supplying services with the place of supply in another EU Member State, where the recipient is responsible for tax payments.
Registered taxable persons in Latvia can specify a definite period for their VAT registration, aligning with their taxable activities.
Does Your Company Require a Latvian VAT Number?
Latvian VAT operates within the broader EU VAT system, meaning that registration rules parallel those in other EU nations. Foreign entities are typically required to register for VAT in Latvia under several circumstances, including:
- Purchasing, producing, and selling goods in Latvia.
- Importing goods into Latvia.
- Engaging in distance selling, such as online sales to Latvian consumers.
- Maintaining stock in Latvian warehouses or on consignment.
- Holding paid training/exhibition events.
- Supplying, installing, and maintaining equipment in certain scenarios.
Interestingly, the registration threshold for foreign companies is often zero, except for distance selling, where it is set at 10,000 euros.
Specific Cases for EU Companies
EU VAT payers must register for VAT in Latvia when supplying goods to non-taxable or non-registered taxable persons and subsequently assembling or installing those goods domestically. The registration must occur before the transaction takes place, irrespective of the value of the goods.
For distance sales of goods, EU VAT payers should register with the State Revenue Service’s VAT register:
- Within 30 days from reaching or exceeding EUR 10,000 in total sales in the preceding or current calendar year.
- Before engaging in transactions involving excise duty goods, regardless of the excise goods’ value.
In cases of distance sales, EU VAT payers can also register before reaching the above-mentioned threshold.
When an EU VAT payer has a fixed establishment in Latvia participating in the sale of foreign company goods, the fixed establishment should undergo VAT registration in Latvia before commencing sales activities. A “fixed establishment” signifies substantial business representation in Latvia through labor and technical resources.
Who Should Be Registered in the VAT Register?
If an EU or third-country VAT payer conducts at least one taxable transaction in Latvia, one of the following individuals or entities should be registered in the VAT Register:
- A taxable person from another EU Member State.
- An authorized person within Latvia.
Necessary Documentation for VAT Number Registration
To successfully register for a Latvian VAT number, you’ll need the following documents:
- A copy of the foreign company’s registration certificate.
- An extract from the relevant Commercial Register listing authorized representatives.
- A copy of the foreign company’s VAT (or similar tax) registration certificate.
- A notarized power of attorney if someone else is handling the registration on your behalf, signed by an authorized person within the foreign company.
- Additional information, not typically included in the above documents, such as contact details for authorized representatives, current bank account information, share capital details, and contact persons in Latvia.
Navigating the VAT Registration Process with Breicis.com
Breicis.com is your trusted partner in ensuring seamless VAT registration in Latvia. Our team of experts possesses a profound understanding of Latvian tax laws and the EU VAT Directive. We streamline the registration process, offering guidance on documentation and ensuring compliance with the relevant regulations.
In an era where international business opportunities abound, VAT registration is essential. Let Breicis.com be your companion on this journey, ensuring your business operates smoothly within the Latvian and EU VAT framework.