PVN (Latvian VAT)
In Latvian: PVN (pievienotās vērtības nodoklis)
PVN (pievienotās vērtības nodoklis) is Latvia’s value added tax: a consumption tax that a VAT-registered business adds to the price of goods and services and pays to the state after deducting the VAT it paid its own suppliers. The standard rate is 21%, the reduced rates are 12% and 5%, and certain supplies are taxed at 0%.
VAT in Latvia is governed by the Value Added Tax Law, which transposes the EU VAT Directive 2006/112/EC. It applies to supplies of goods and services for consideration, to purchases of goods from other EU countries and to imports. The State Revenue Service (VID) administers it.
The final consumer bears the tax, because each business in the chain pays only the difference: the VAT charged on its own invoices minus the input VAT it paid on its purchases. That difference is worked out in the VAT return for each month or quarter.
Only a business registered in the VID VAT register may charge VAT on an invoice. A business whose turnover in Latvia stays within EUR 50,000 in a calendar year may stay unregistered, and then adds no VAT to its invoices.
Example
SIA “Ozols” is VAT-registered and sells a table for EUR 200 before VAT. It adds 21% VAT, EUR 42, and the customer pays EUR 242. If SIA “Ozols” paid EUR 21 of VAT on the materials, it pays EUR 21 to the budget for this sale.
How Fakts handles it
Fakts applies every Latvian VAT rate (21%, 12%, 5% and 0%) on an invoice and recalculates the line totals on the server before saving.
Legal basis
- Value Added Tax Law, Section 41 likumi.lv
- Value Added Tax Law, Section 5 likumi.lv
This explanation is for information and does not replace tax or legal advice. The law in its current consolidated text prevails.