Taxes in Europe Database v2
Law "On Turnover Tax" (in force from October 1, 1992 till April 30, 1995)
Law "On Value Added Tax" (in force from May 1, 1995 till December 31, 2012)
Value Added Tax Law (in force from January 1, 2013)
Turnover threshold for SMEs 50,000 EUR.
The forestry is not subject to the flat-rate scheme for farmers.
There is a special reverse charge scheme on transactions related to supply of timber, scrap metal and construction services.
Persons liable to the value added tax are natural or legal persons or groups of persons who are bound by contract or agreement, or representatives of such groups, who are registered in the State Revenue Service Value Added Tax Payers Register.
VAT shall not be imposed on the following supplies of goods and services:1) postal services, provided by universal postal service provider;2) postage payment marks issued and sold in accordance with the Postal Services Law;3) medical services and with medicine related services;4) supplies of human organs, breast milk and human blood;5) dental services;6) services, provided by dental technicians and dental hygienists to patient;7) services provided by cooperative societies to members of these cooperative societies if exemption do not create significant competition distortion;8) social care, professional and social rehabilitation, social assistance and social work services which are provided by persons who are registered in the social service provider register;9) fees for children attending pre-school institutions;10) State approved educational services of institutions which provide general education, vocational education, high education and interest education;11) educational services, which educational institutions ensure for other educational institutions;12) private lessons provided by a teacher within the scope of the general education, vocational education and higher education teaching programmes;13) carriage of schoolchildren that is conducted by carriers licensed specially for this purpose if these services are financed from local government budgets;14) fees for professional training or retraining of the unemployed, which is organised by the State Employment Service;15) the following cultural events – theatre and circus shows, concerts, performances for children, performances of amateur arts groups and for charitable purposes, activities of museums, exhibitions, zoos and botanical gardens;16) remuneration received by the author for work and utilisation thereof, as well as remuneration received by a performer and a phonogram producer for neighbouring rights object and utilisation thereof;17) supplies of gold, coins and bank notes to the Bank of Latvia;18) insurance and re-insurance services provided by insurers and insurance agents;19) the following financial transactions:
a) granting and control of credits and monetary loans;b) services, which are related to the attraction of deposits and other refundable funds, the conduct of payments in cash and other than cash payments, and fiduciary (trust) operations;c) services related to the issuing and servicing of instruments of payment, as well as trading in instruments of payment and other money market instruments, except instruments of payment supplied for collections or containing precious metals;d) services (including intermediary), which are related to investments in capital and the holding, disposal and administration of securities, as well as the issuing of securities;
20) investment services which are related to the management of financial resources of investment funds, open pension funds and risk capital funds;21) gambling, raffles and lotteries; 22) sale of real estate, except for the first sale of unused real estate and the sale of land for building;23) payments by persons for:
a) the rent of residential premises;b) the management services of a dwelling house,
24) the supply of services by independent groups of persons, who are carrying on an activity which is exempt from VAT or in relation to which they are not taxable persons, for the purpose of rendering their members the services directly necessary for the exercise of that activity, where those groups merely claim from their members exact reimbursement of their share of the joint expenses, provided that such exemption is not likely to cause distortion of competition.
There is a special reverse charge scheme on transactions related to supply of timber in accordance with Article 395 of Directive 2006/112/EC.
Tax rate is changed since 2012/07/01
The reduced rate is aplicable only to the foodstuffs for infants.
The reduced rate is not aplicable to the pharmaceutical products for veterinary purposes, supply of children's seats, supply of brochures.
The reduced rate is aplicable only to the supply of educational literature editions, as well as original literature editions.
The reduced rate is aplicable to the newspapers, magazines, periodical publications issued not less freaquently than in 3 month and the circulation exceeds 100 copies, and licence fee (except erotic and comercial publications).
The reduced rate is aplicable only to the district heating to inhabitants for hosehold usage.
The reduced rate is aplicable to the supplies of the following wood and firewood to inhabitants for household usage: a) in the form of billets, twigs, faggots or in similar forms, b) wood chips or particles, c) sawdust and firewood residues, d) sawdust and firewood residues in the form of agglomerated or non-agglomerated briquettes, granules or similar.
The tax calculated for a taxation period is paid within 20 days following the end of the relevant taxation period.
State Revenue Service.