Zero rate (0% VAT)
In Latvian: Nulles likme (PVN 0%)
The zero rate (nulles likme) is a 0% VAT rate applied mainly to exports of goods outside the EU and to supplies of goods to a VAT-registered buyer in another EU country. The supply stays taxable, so the seller keeps the right to deduct input VAT.
The zero-rated cases are listed in Sections 43 to 50 of the VAT Law: exports, intra-Community supplies of goods, services directly linked to exports and imports, and certain ship, aircraft and diplomatic transactions. A supply of goods to another EU country needs two things: the buyer has a valid VAT number from another EU country, and transport documents prove the goods left.
The zero rate is not an exemption. With an exempt supply, such as insurance or residential letting, input VAT cannot be deducted, whereas with a 0% supply it can. That is why an exporter’s VAT return can show a refund.
A 0% invoice must cite the section of the VAT Law or article of the EU VAT Directive that allows the rate. The domestic reverse charge is not a 0% rate: it is a separate procedure in which the buyer accounts for the VAT.
Example
SIA “Ozols” sells furniture worth EUR 5,000 to a Lithuanian company with a valid LT VAT number and ships it to Vilnius. It invoices at 0% citing Section 43(4) of the VAT Law, reports the sale in its VAT return and PVN 2 report, and the buyer accounts for VAT in Lithuania.
How Fakts handles it
Fakts stores a reason on every 0% line (export, intra-EU supply, reverse charge, exemption or supplier not VAT-registered), prints it under the invoice table and uses it to set the VAT category in the e-invoice.
Legal basis
- Value Added Tax Law, Section 43 likumi.lv
- Value Added Tax Law, Section 125(1), Clause 15 likumi.lv
This explanation is for information and does not replace tax or legal advice. The law in its current consolidated text prevails.