The standard rate of VAT in Latvia is 18%. There are reduced rates of 5% and 0%.
VAT is charged on assets and services provided in Latvia as well as on imports into Latvia.
Exports from Latvia are not subject to value added tax.
Income from financial services, such as insurance and banking services are exempt from VAT and legal advice, subject to the conditions in law, is exempt from VAT.
Any business with a turnover in excess of LVL 10,000 (approximately Euro 14,000) in the previous 12 months is obligated to register with the VAT authorities.
VAT at the rate of 5% is payable on medications, veterinary medications, special equipment for children, communications services, sewage services and services for the removal of domestic garbage.
The following operations are exempt from VAT, subject to the definitions:
- Educational services.
- Medical services.
- Cultural services.
- Lotteries and gambling.
- Financial services provided by banks and insurance companies.
- Gifts and donations for humanitarian aims.
Real Estate Transfer Tax
The transfer tax tax is payable in Latvia on real estate, buildings and land, according to their value at the Land Registry Office.
The tax of 2% is imposed on the buyer.
Property Tax
A tax of 1% is imposed when owning real estate.
The tax for buildings and land is 1% of the cadastral value.
