Invoicing services to an EU business: reverse charge

When you provide a service to a business in another EU country, the general rule puts the place of supply in the customer’s country (Section 19(1) of the Latvian VAT Act), so no Latvian VAT is charged and the customer accounts for VAT at home. The invoice must show the customer’s VAT number and the words “nodokļa apgrieztā maksāšana” (reverse charge, Section 125(1), point 16); this is the rule as of September 2026.

Updated:

At a glance

Wording on the invoice
Nodokļa apgrieztā maksāšanaReverse charge Latvian law asks for “nodokļa apgrieztā maksāšana”. For a foreign customer it is usually paired with the VAT Directive’s term “Reverse charge” (Article 226, point 11a).
VAT on the invoice
No Latvian VAT
Peppol VAT category
AE · VATEX-EU-AE
VAT return, supplier
row 48.2 Row 48.2 (supplies whose place is outside Latvia). The customer and amount go on the monthly VAT 2 report.
VAT return, buyer
The customer accounts for VAT at its own country’s rate and deducts it where allowed.
Legal basis
Latvian VAT Act, Section 19(1)

Sample invoice

SIA “Parauga Dizains”
Invoice No. PD-2026/031
Date of issue
30/09/2026
Due date
14/10/2026
Supplier SIA “Parauga Dizains” Reg. No. 40000000082 VAT No. LV40000000082 Parauga iela 82, Rīga, LV-1082
Customer Muster GmbH Reg. No. HRB 000000 VAT No. DE123456789 Musterstraße 1, 10115 Berlin, DE
DescriptionQtyUnitUnit price excl. VATAmount excl. VAT
Website design, September1pcs2,400.002,400.00
User testing16h55.00880.00

Nodokļa apgrieztā maksāšana / Reverse charge

Total excl. VAT
3,280.00 EUR
Total due
3,280.00 EUR
A specimen with made-up companies, numbers and amounts.

When this applies

The general rule: when the customer is a taxable person, the place of supply is where the customer is established (Section 19(1)). That covers most professional services: design, software development, consulting, accounting, translation, marketing.

Exceptions where the place is set differently, and VAT may fall due in another country or in Latvia:

  • Services connected with real estate, including construction, architects and accommodation: where the property is (Section 25).
  • Admission to cultural, sporting, educational and entertainment events: where the event takes place (Section 20(1)).
  • Passenger transport: where the transport takes place (Section 21).
  • Restaurant and catering services: where they are physically provided (Section 29).
  • Short-term hire of a means of transport, up to 30 days: where it is handed over (Section 28(1)).

Register for VAT first

You must register in the Latvian VAT register before you start providing such services (Section 55(1), point 3), and the right to stay unregistered below 50,000 euro does not apply to them (Section 59(8)). That includes self-employed freelancers.

What the invoice must show

  • The customer’s VAT number with its country prefix, checked in VIES.
  • The words “nodokļa apgrieztā maksāšana”; for a foreign customer also “Reverse charge”.
  • No Latvian VAT rate or amount. In this case the law even lets you leave out the unit price and discounts (Section 129(2)), though most suppliers show the price so the customer can check the invoice.
  • Every other ordinary detail: number, date, both parties, the service, the period and the amount.

Deadlines, the VAT return and VAT 2

Issue the invoice by the 15th of the following month (Section 131(2), point 2). Your VAT period becomes a calendar month (Section 115(1), point 4). The amount goes in row 48.2 of the return, and the monthly VAT 2 report lists the customer’s VAT number and the amount (Section 118(6), point 2).

Customers outside the EU

For a business customer outside the EU, such as one in the United States, Section 19(1) also puts the place of supply in the customer’s country, so no Latvian VAT is charged. The amount goes in row 48.2 but not on VAT 2, which covers the EU only. The law sets no wording for this case; a reference such as “Latvian VAT Act, Section 19(1), place of supply outside Latvia” explains why there is no VAT.

In a Peppol e-invoice

The line takes VAT category AE (reverse charge) at a rate of 0 with the code VATEX-EU-AE. Rule BR-AE-02 requires the seller’s VAT number and the buyer’s VAT number or legal registration number.

Common mistakes

  • Charging Latvian 21% VAT to an EU business although the place of supply is the customer’s country.
  • Serving EU business customers without being registered for VAT.
  • Putting services in row 45, which is for goods.
  • Not checking the customer’s VAT number in VIES. A customer that is not a taxable person may be a consumer, and other rules apply.
  • Invoicing real estate, event admission or catering services under the general rule.

Frequently asked questions

Do I charge VAT to an EU business customer?

No, when the customer is a business in another EU country and the general rule applies. The customer accounts for VAT at home, and your invoice says “nodokļa apgrieztā maksāšana” (reverse charge).

What should a Latvian invoice to a foreign client say?

The client’s VAT number and “Nodokļa apgrieztā maksāšana / Reverse charge”. No Latvian VAT rate or amount.

Do I need to be VAT registered to work for EU clients?

Yes. Before providing services whose place of supply is another EU country and where the customer pays the VAT, you must register, whatever your turnover (Latvian VAT Act, Section 55(1), point 3, and Section 59(8)).

What if the EU customer has no VAT number?

If the customer is a private person, the place of supply is generally Latvia and Latvian VAT applies (Section 19(2)). There are exceptions, for example for electronically supplied services (Section 27).

Which row of the Latvian VAT return is for services to EU businesses?

Row 48.2. The customers and amounts also go on the monthly VAT 2 report.

Issue the invoice with the right VAT statement

Fakts keeps the reason on every 0% line, prints the statement under the lines and files the matching Peppol VAT category. The account is free.

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Sources