Latvian new VAT return and registration changes

Updated VAT return and online registration changes in Latvia

 Following these changes, a new box has been added to appendix PVN1-I where taxpayers must report local purchases, intra-Community acquisitions from non-VAT registered businesses and certain imports.

In addition, new rules were published regarding data requirements in appendix PNV1-III. This appendix includes a listing of all invoices issued and received for an amount above a certain threshold. This threshold has now been reduced from €1,430 to €150, hence significantly increasing the number of transactions to be included in this section of the VAT return.

Registration to online submission of Latvian VAT returns

The Latvian authorities made it harder for taxpayers to appoint a third party handling their VAT returns. The system used to submit VAT returns online in Latvia is EDS. Previously, to allow someone to submit returns on your behalf, you were only required to submit a Power of Attorney signed by the legal representative of the company and then registered in the authorities’ system.

Going forward, the authorization must be given in person or via EDS directly by the legal representative. In person means physically visiting the tax authorities in Latvia and signing such authorization before the tax authorities. Via EDS means creating an online account for the legal representative so he can log-in to his personal account and appoint someone through the system.

New Latvian VAT registration thresholds

With effect from 1 January 2018, Latvia updated the thresholds requiring small businesses to registered and account for VAT. The new threshold was reduced from €50,000 to €40,000 of taxable supplies per year.

VAT registration thresholds apply only to domestic established businesses. Foreign companies not established in Latvia are required to register for VAT purposes as soon as the first taxable transaction is carried out.