Self-employed in Latvia: invoices, records and tax in 2026

Obligations and what Fakts does

General tax regime, 2026 rates. Rows marked in development are not in Fakts yet.

1. Invoice

   An invoice shows the document name, date, number, your name, surname and taxpayer registration code (which is your personal code), the buyer, a description and the amount. A private buyer's personal code is left off unless they ask for it or another law requires it.

   Accounting Law art. 11(5)

   What Fakts does

   Every invoice gets the next sequential number in its series. You enter your name, surname and personal code once and they are on every invoice. Invoices go out by email with the PDF and the Peppol XML.

   The code is printed under the label "Taxpayer code".

2. VAT

   You must register for VAT once turnover passes €50,000 in a calendar year, and the threshold does not apply in a year after one in which you passed it. Until then an invoice must not show VAT, because VAT shown on an invoice is owed to the budget. Services you supply under the general rule to businesses in other EU countries (VAT Law art. 19(1)) have no threshold: you register straight away. Buying services from foreign businesses or goods in other EU countries, you can stay under the threshold with the special registration: the VAT number is used only for those purchases, you pay their VAT yourself, and your invoices still carry none.

   VAT Law art. 59, 84 and 139.2

   What Fakts does

   If you are not VAT registered, Fakts sets lines to 0% with the reason "not a VAT payer" and prints "The supplier is not registered for VAT" under them. The dashboard shows domestic turnover for this calendar year against €50,000 with the registration deadline, and a 12-month ruler that warns earlier. Before you issue an invoice for services to a business in another EU country, Fakts reminds you that you must register.

   The invoice has no VAT column and no VAT totals.

3. Income and expense records

   With last year's turnover at or under €300,000 you may keep single-entry books: income on the day it is received, expenses on the day they are paid. No journal is needed if every business payment is cashless through a separate business account: the statements are the record.

   Accounting Law art. 10; Cabinet Regulation No. 322

   What Fakts does

   When you mark an invoice or a purchase paid, Fakts asks for the payment date if you are self-employed, because that date decides which period the income or expense belongs to. Fakts reads purchase invoices you upload or forward to cc@fakts.lv.

   The income and expense journal in the Regulation 322 layout is built from invoices and purchases, each payment on its own day at the ECB rate of that day, and from royalties; you add cash and other entries yourself, and it prints. You can load a bank statement in camt.053 format and confirm each line as an invoice payment, a paid purchase or a journal entry.

4. Expenses

   Business expenses are deductible. Items up to €1,000 are expensed at once; dearer fixed assets are depreciated (computers 35% a year, buildings 5%, technological equipment 10%, others 20%). For the running costs of property also used privately you deduct the business share, or 70% if you cannot document it; depreciation of a fixed asset partly used privately is 50% without documents. Private car costs: up to 70% with a trip log, 50% without, unless you pay the company car tax on it. Losses carry forward 3 years.

   Personal Income Tax Law art. 11 and 11.5

   What Fakts does

   Every confirmed purchase is kept with the original document, supplier, dates and amounts.

   Each purchase takes an expense type and a business share, and items over 1,000 EUR can be kept as fixed assets with depreciation.

5. Social tax (VSAOI)

   With monthly profit of at least €780 you pay 31.07% on at least €780 (you may choose more) and 10% to pension on the rest. Below €780 you pay only the 10% pension contribution. A self-employed pensioner pays 29.36%. Report by the 17th and pay by the 23rd after each quarter with contributions. Minimum contributions no longer apply from 2026.

   Law on State Social Insurance art. 14.1, 21 and 23; Cabinet Regulation No. 786

   What Fakts does

   The self-employed calculator turns your profit into VSAOI per month and per quarter. Every deadline is on the tax calendar.

   The dashboard estimates what to set aside for VSAOI and IIN or the microenterprise tax, worked out from the income and expense journal with every step shown.

6. Income tax (IIN)

   Income tax on business profit is 25.5% up to €105,300 a year and 33% above, plus 3% on total income over €200,000. The non-taxable minimum is €550 a month (€570 in 2027). File the annual return from 1 March to 1 June and pay by 23 June; with income over €105,300 a year, file from 1 April to 1 July and pay by 23 July. Tax over €640 can be paid in three parts. There have been no advance payments since 2023.

   Personal Income Tax Law art. 12, 15, 15.1 and 19

   What Fakts does

   The calculator works out the year's IIN after VSAOI and the non-taxable minimum.

   The app lists the deadlines that apply to you with the amount, lets you mark them done and, if you choose, emails a reminder, and gives the year's figures for the D3 appendix as CSV and PDF.

7. Micro-enterprise tax

   Micro-enterprise tax is 25% of turnover with no expenses deducted, while turnover stays under €50,000. Declare by the 15th and pay by the 23rd after each quarter. Becoming VAT registered ends the status from the next year.

   Micro-enterprise Tax Law art. 4, 6 and 7

   What Fakts does

   The calculator shows whether micro-enterprise tax or the general regime leaves you more for your turnover and expenses.

8. Royalties

   If you have not registered a business, the payer withholds 25% (80% of it social tax, 20% income tax) and that settles the tax; this regime runs until 31 December 2027. If you have registered, the payer withholds nothing and the royalty is business income. A collective management organisation withholds 25.5% income tax after the expense norm either way.

   Personal Income Tax Law, transitional provisions 163 to 171

   What Fakts does

   The royalties section records royalties received and makes an acceptance act from them. The royalty calculator shows the withholding both ways.

9. E-invoices

   Invoices to state bodies must already be structured e-invoices, and from 1 January 2028 so must invoices to other Latvian businesses. This covers the self-employed too; invoices to private persons are outside it.

   Accounting Law art. 11(14); Cabinet Regulation No. 749

   What Fakts does

   Fakts makes a Peppol BIS 3.0 / UBL 2.1 XML for every invoice.