While your turnover is small, you can stay outside VAT. But there is a line — €50,000 — beyond which registration becomes mandatory. Here is how it works, and what happens when you cross it.
The number: €50,000
In Latvia, once the value of your taxable supplies reaches €50,000, you must register with VID as a VAT payer. The threshold was raised from €40,000 to €50,000 on 1 January 2024.
Over what period is it counted
This is the bit that often gets stated imprecisely. Since 2025 the law measures the threshold within the calendar year — you track turnover from the start of the year. You will also hear it described as “the last 12 months.” In practice the safe approach is simple: watch your running total and don't wait for the last minute. If your case is borderline, confirm it directly with VID.
What happens when you cross it
- you must register with VID as a VAT payer, promptly;
- you start adding VAT to invoices (usually 21%, sometimes 12% or 5%);
- you file a VAT return regularly;
- in exchange, you can deduct input VAT on your own purchases.
Registering for VAT is not a penalty — for larger clients it is often an advantage, since they recover their input VAT. The thing that matters is not missing the moment it becomes mandatory.
If you trade across borders
Since 2025 there is an EU small-business scheme: if your EU-wide turnover for the year stays below €100,000 and under each country's local threshold, you can apply an exemption in other EU states without registering there separately. A Latvia-based business applies through VID and receives a special “EX” number.
How fakts helps
fakts warns you already at €40,000 — well before the line — so registration is never a surprise. It is a deliberately conservative, early warning: better to know ten thousand euros early than one day too late.