Input VAT (priekšnodoklis)
In Latvian: Priekšnodoklis
Input VAT (priekšnodoklis) is the VAT that a registered VAT payer paid or accounted for on goods and services bought for its business and deducts from the VAT it owes. The budget receives the difference between output VAT and input VAT.
Input VAT is the VAT shown on other VAT payers’ invoices, VAT paid on imports, and VAT the business accounts for itself under the reverse charge and on goods from other EU countries (VAT Law, Section 92). It may be deducted only where the purchase is used for taxable supplies.
Input VAT is deducted in the tax period in which the goods or services and the invoice were received, and no later than the following period unless the law says otherwise. There are limits: 60% of the VAT on entertainment costs is not deductible, and for passenger cars, their lease and running costs usually only 50% is.
A business that is not VAT-registered deducts nothing: the VAT it pays is simply part of its costs. If input VAT exceeds output VAT in a period, the return shows an overpayment.
Example
In one month SIA “Ozols” issued invoices carrying EUR 4,200 of VAT and paid EUR 2,800 of VAT on supplier invoices for materials and bookkeeping. Its input VAT is EUR 2,800, so it pays EUR 1,400 to the budget.
How Fakts handles it
The Fakts VAT summary takes input VAT from the bills recorded under Purchases and shows the difference from output VAT.
Legal basis
- Value Added Tax Law, Section 92 likumi.lv
- Value Added Tax Law, Section 97 likumi.lv
- Value Added Tax Law, Section 100 likumi.lv
This explanation is for information and does not replace tax or legal advice. The law in its current consolidated text prevails.