Latvia VAT Calculator (PVN) — 2026 Rates

Latvia's standard PVN rate has not moved since 2012. Almost everything else about Latvian VAT changed in 2026 — which products sit in which reduced band, what language a book has to be in, and when e-invoice data starts flowing to the tax authority.

21% is the stable part

Latvia charges 21% as its standard rate. It reached that figure by an unusual route: the rate was 21% before the financial crisis, was pushed to 22% in January 2011 as a consolidation measure, and was cut back to 21% on 1 July 2012 once the programme ended. It has stayed there ever since, which makes Latvia one of the more stable headline rates in the region — Estonia next door has changed its standard rate twice since 2024.

The action is entirely in the reduced bands, and 2026 moved a great deal of it.

The food pilot: a VAT cut designed to be measured

On 1 July 2026 the rate on four basic food groups fell from 21% to 12%: bread of all kinds, fresh cow, sheep and goat milk, fresh and chilled poultry, and fresh poultry eggs in shell. What makes this different from an ordinary rate cut is that Parliament wrote an expiry date into it. The reduced rate runs for exactly one year, to 30 June 2027, because the purpose is to observe how much of a nine-point cut actually reaches shelf prices rather than being absorbed into margins along the chain.

Two operational consequences follow. First, the reversal is already scheduled: pricing models, till configurations and supply contracts covering mid-2027 need a planned change back to 21%, not a scramble. Second, the product boundaries were drawn tightly, because a loose scope would have blurred the very measurement the pilot exists to produce.

Those boundaries catch people out. UHT and condensed milk stay at 21%, as do flavoured milk drinks and plant-based alternatives such as oat and almond drinks. Frozen poultry is out; so are sausages and dried or cured meats. Pastries, cakes, pies, crackers, toast and breadcrumbs are out, despite being baked goods. The working rule is that the reduced rate covers the plain form of each product and stops the moment processing goes beyond it.

The rest of the 12% band, and what became permanent

The food pilot sits alongside a standing 12% band that covers medicines and medical devices authorised for the Latvian market, specialised food for infants, domestic public transport, thermal energy and firewood supplied to households, and accommodation services in Latvia.

One item in that list has its own history. The 12% rate on fresh fruit, berries and vegetables typical to Latvia had been running on a sequence of temporary extensions since it was introduced, each one requiring a fresh legislative act and each one leaving growers and retailers uncertain about the following season. From 1 January 2026 it is permanent. That is a smaller headline than the food pilot but a bigger deal for anyone planning a planting or stocking cycle around it.

The 5% band now turns on language, not product

Latvia's super-reduced 5% rate applies to books, textbooks and periodical press. Until 2026 that was a straightforward product test. From 1 January 2026 it is a language test as well.

A publication qualifies for 5% if it is in Latvian, Latgalian or Livonian — the state language plus Latvia's two protected historical languages — or in an official language of an EU, EEA or OECD member state, which brings in English, German, French and the rest. A publication in a language outside that set falls back to the 21% standard rate; in the Latvian market the practical case is Russian.

For a bookshop, a distributor or an online retailer this pushes VAT determination out of the product hierarchy and into the item metadata. The same title in two translations can now carry two different rates, and a system that derives the VAT code from a product category alone will get one of them wrong. The liability for undercharging sits with the seller, so the language attribute has to become a required field rather than a nice-to-have.

Latvia's domestic reverse charge is unusually wide

A significant share of Latvian domestic B2B supply carries no VAT on the invoice at all, because the tax shifts to the buyer. The list was built up over two decades of fraud-response legislation and now covers timber and related services (in place since 1999), scrap metal and related services (since 2011), construction services, mobile phones, tablets, laptops, integrated-circuit devices and games consoles, cereals and industrial crops, unwrought precious metals and precious-metal alloys, and semi-finished ferrous and non-ferrous metal products.

Three conditions must hold together: the supply takes place in Latvia, the supplier is a registered Latvian VAT payer, and so is the recipient. Where they do, the supplier issues an invoice with no VAT and a reverse-charge reference, and the customer accounts for both the output and the input VAT on its own return — cash-neutral for a fully taxable buyer.

Getting this wrong is asymmetric. Charging 21% on a supply that should have been reverse-charged is not a harmless overcollection, because VAT that was not lawfully due is generally not deductible by the customer — the buyer is left holding an amount it paid and cannot reclaim, and will come back to the supplier for it.

Registration, EDS filing, and the e-invoicing runway

Registration is triggered at €50,000 of taxable supplies over any rolling 12-month period — raised from the older €40,000 figure, and measured on a rolling basis rather than by calendar year. You have 15 days from crossing it to file the application with the State Revenue Service. Businesses with no establishment in Latvia have no threshold and register before their first taxable supply unless the transaction falls under the reverse charge. A separate €10,000 threshold applies to intra-EU acquisitions of goods by non-taxable persons.

Registered payers file the PVN return electronically through VID's Electronic Declaration System. The default period is the calendar month, with a quarterly period available to smaller businesses; the return is due by the 20th of the month following the period and the tax is payable by the 23rd.

Latvia's e-invoicing timetable has three dates worth putting in a plan. Structured e-invoicing to budget institutions became compulsory on 1 January 2025, using EN 16931 in Peppol BIS Billing 3.0 format. From 1 January 2026, e-invoice data for government, B2G and G2B transactions must also be reported to VID. The general B2B mandate was originally legislated for 2026, but on 5 June 2025 the Saeima postponed it to 1 January 2028, when B2B e-invoice data reporting to VID begins as well. Businesses that already sell to the public sector have the format problem solved; the 2028 date is about extending it to every counterparty.

Zero-rated is not the same as exempt

Latvia's 0% band and its exempt list both produce an invoice with no PVN on it, and the resemblance stops there. Zero-rating is a rate applied to a taxable supply: exports outside the EU, intra-EU supplies of goods to a VAT-registered business in another member state, and international transport all sit here, and the input VAT on the costs of making those supplies stays fully deductible. Exemption removes the supply from the tax altogether — financial and insurance services, medical care, and much of education — and takes the corresponding input VAT deduction with it.

That distinction decides whether voluntary registration below the €50,000 threshold is worth doing. A small exporter registering voluntarily recovers the VAT on its Latvian costs while charging 0% on its sales, which is a genuine cash benefit. A small clinic or insurance intermediary registering voluntarily gains almost nothing, because its output is exempt rather than zero-rated and the input VAT stays stranded. Businesses that make both kinds of supply have to apportion their input VAT, which is where most Latvian partial-exemption disputes begin.

Latvian VAT formulas

Express the rate as a decimal — 21% is 0.21, 12% is 0.12, 5% is 0.05 — and both directions follow from the same relationship.

Add 21% PVN (net → gross)

Remove 21% PVN (gross → net)

To model the food pilot against the old rate, hold the net price still and change the multiplier: a loaf with a net price of €4.13 sold for €5.00 including 21% VAT, and sells for €4.63 including 12% VAT. Full pass-through of the cut is therefore about 37 cents on a €5 loaf — which is precisely the number the pilot was designed to observe. For the reduced bands, divide by 1.12 for 12% and by 1.05 for 5%.