Standard VAT rate (21%)
In Latvian: PVN standartlikme
The standard VAT rate in Latvia (PVN standartlikme) is 21%. It applies to every taxable supply for which the VAT Law sets no reduced rate (12% or 5%), no 0% rate and no exemption.
The standard rate is the default: most goods and services are taxed at 21%, including IT, consulting, repair and advertising services. The reduced rates and 0% are exceptions listed in the law, so they apply only where a supply clearly fits one of them.
Where goods are supplied as a set, each item takes its own rate rather than one shared rate. The rate is shown against each line of the invoice, and in the VAT return the VAT charged at the standard rate goes in row 52.
VAT is calculated on the amount before VAT: EUR 100 times 21% is EUR 21. When the amount including VAT is known, divide it by 1.21 to extract the tax: EUR 121 contains EUR 21 of VAT.
Example
An accounting firm invoices EUR 800 before VAT for a month of services. VAT at 21% is EUR 168, and the client pays EUR 968.
How Fakts handles it
Fakts lets you enter prices including VAT: the tax is extracted, and the invoice still prints the unit price without VAT, as the EU VAT Directive requires.
Legal basis
- Value Added Tax Law, Section 41 likumi.lv
- VID guidance on completing the VAT return (in Latvian) vid.gov.lv
This explanation is for information and does not replace tax or legal advice. The law in its current consolidated text prevails.