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November 18, 2024
2024-2108

Latvia to require business-to-government e-invoicing as of 1 January 2025

  • As of 1 January 2025, local Latvian companies must issue structured e-invoices to Latvian budgetary institutions.
  • The e-invoice mandate will extend to all business-to-business transactions as of 1 January 2026.
  • Multinational entities doing business in Latvia should become familiar with the requirements applicable to them.
 

Beginning 1 January 2025, any locally registered company issuing invoices to Latvian budgetary institutions, such as state or municipal entities, must submit them as structured e-invoices. The e-invoices must comply with the specific technical standards, such as the eXtensible Markup Language (XML) format and Pan-European Public Procurement On-Line Business Interoperability Specifications (PEPPOL BIS) Billing 3.0 standard.1

E-invoicing requirements

E-invoices are required for any business-to-government (B2G) transactions performed by entities registered in Latvia, where the place of transaction is Latvia. The e-invoicing requirement applies to all transactions with government entities, not just to public procurement transactions.

From 1 January 2026, all businesses registered in Latvia will be required to exchange invoices electronically, extending the e-invoice mandate to business-to-business (B2B) transactions.

Based on the latest reports from authorities, the scope of e-invoicing will not include domestic transactions where only local value-added tax (VAT) registration of a foreign business is involved.

The e-invoicing system will allow for different data-exchange methods, including direct integration with accounting systems via an application programming interface (API) and the use of "e-Address" portal functionality.

What's next

The Latvian State Revenue Service is set to establish the technical framework and rules for e-invoice exchange and reporting by 1 July 2025. It is anticipated that these regulations will primarily define how information on issued e-invoices should be reported to the tax authorities. Multinationals with business interests in Latvia will want to become familiar with the new rules and regulations when they are released and take care to comply with reporting deadlines.

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Endnote

1 The PEPPOL BIS Billing 3.0 standard is a European-wide framework designed to help ensure interoperability and standardization across borders.

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Contact Information

For additional information concerning this Alert, please contact:

Ernst & Young Baltic SIA (Latvia), Riga

Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor
 
 

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