Invoicing semi-finished metals in Latvia under the reverse charge

For supplies of semi-finished ferrous and non-ferrous metals in Latvia between VAT-registered businesses, the buyer pays the VAT (Section 143.4 of the Latvian VAT Act), and the goods are defined by Combined Nomenclature codes in Annex 7 of Cabinet Regulation No. 17. The invoice shows the value without VAT and “nodokļa apgrieztā maksāšana”; metalworking services have carried ordinary VAT since 1 July 2019. This is the rule as of September 2026.

Updated:

At a glance

Wording on the invoice
Nodokļa apgrieztā maksāšana The Latvian words are mandatory. A reference to the article is optional but tells the customer why no VAT is charged; the English “Reverse charge” can be added for a reader who needs it.
VAT on the invoice
No rate, no VAT amount
Peppol VAT category
AE · VATEX-EU-AE
VAT return, supplier
row 41.1 Row 41.1; every invoice goes in part III of the VAT 1 report whatever the amount.
VAT return, buyer
Calculates 21% VAT: rows 52 and 62, code “R7” in part I of VAT 1.
Legal basis
Latvian VAT Act, Section 143.4

Sample invoice

SIA “Parauga Metālapgāde”
Invoice No. PM-2026/532
Date of issue
23/09/2026
Due date
07/10/2026
Supplier SIA “Parauga Metālapgāde” Reg. No. 40000000061 VAT No. LV40000000061 Parauga iela 61, Rīga, LV-1061
Customer SIA “Parauga Metālapstrāde” Reg. No. 40000000062 VAT No. LV40000000062 Parauga iela 62, Ogre, LV-5001
DescriptionQtyUnitUnit price excl. VATAmount excl. VAT
Hot-rolled steel sheet 2 mm (CN 7208)1.8t890.001,602.00
Aluminium profile 40 × 40 mm (CN 7604)240m6.401,536.00

Nodokļa apgrieztā maksāšana / Reverse charge (Latvian VAT Act, Section 143.4)

Total excl. VAT
3,138.00 EUR
Total due
3,138.00 EUR
A specimen with made-up companies, numbers and amounts.

Which goods: CN headings in Annex 7

The rule applies only to goods whose CN code is in Annex 7 of Cabinet Regulation No. 17 (point 58.1). Headings 7217, 7221, 7223 and 7227 are not on the list.

CN headingGoods
7207semi-finished iron or non-alloy steel
7208–7212flat-rolled iron or non-alloy steel
7213–7216bars, rods, angles, shapes and sections of iron or non-alloy steel
7218–7220, 7222stainless steel: semi-finished, flat-rolled, bars and sections
7224–7226, 7228other alloy steel: semi-finished, flat-rolled, bars and sections
7407copper bars, rods and profiles
7604aluminium bars, rods and profiles

What is out

  • Metalworking services such as cutting, bending, welding and surface treatment: ordinary VAT since 1 July 2019.
  • Finished metal products whose CN code is not on the list.
  • Scrap metal, which has its own Section 143.

What the invoice must show

  • The customer’s Latvian VAT number (VAT Act, Section 125(1), point 6). Without it the reverse charge cannot apply, since both parties must be VAT registered.
  • The value of the goods or services without VAT (Section 143.4(2)).
  • No VAT rate and no VAT amount (Section 129(3)). The total due equals the total without VAT.
  • The words “nodokļa apgrieztā maksāšana” (reverse charge, Section 125(1), point 16).
  • Every other ordinary detail: date, number, both parties’ names, addresses and VAT numbers, description, quantity, unit and price without VAT.

Payment

The customer pays the invoiced amount without VAT, and only by non-cash means (Section 143.4(4)). The State Revenue Service treats a bank card payment as non-cash.

In the VAT return

  • The supplier reports the value in row 41.1 and lists every invoice in part III of the VAT 1 report whatever the amount, even below 150 euro (Cabinet Regulation No. 40, points 17.3 and 31.3).
  • The customer calculates VAT at 21% and reports it in row 52 as output tax and in row 62 as input tax, and also in row 66 if the purchase is not used for taxable supplies. In part I of the VAT 1 report each invoice carries the code “R7”.
  • The customer reports the tax in the period in which it received the goods or service and the invoice (VAT Act, Section 124(4) and (5)).

In a Peppol e-invoice

The line takes VAT category AE (reverse charge) at a rate of 0, and the VAT breakdown carries the reason code VATEX-EU-AE or the text “Reverse charge” (rule BR-AE-10). BR-AE-02 requires the seller’s VAT number and the buyer’s VAT number or registration number; BR-AE-05 requires the 0 rate.

How long the rule applies

The Latvian VAT Act sets no end date for this section. Its EU legal basis is Article 199a of the VAT Directive, which Directive (EU) 2022/890 allows member states to apply until 31 December 2026. If the EU basis is not extended, the rule may change from 2027, so check the State Revenue Service and likumi.lv near the end of the year.

Common mistakes

  • Reverse-charging a cutting or welding service.
  • Not checking the CN code and applying the rule to goods that are not in Annex 7.
  • Printing “VAT 0%”.

Frequently asked questions

Which metals are reverse-charged in Latvia?

Semi-finished goods with a CN code in Annex 7 of Cabinet Regulation No. 17: steel semi-finished products, flat-rolled products, bars and sections (7207 to 7228 with gaps), copper bars and profiles (7407) and aluminium bars and profiles (7604).

Are metalworking services reverse-charged?

No. Since 1 July 2019 Section 143.4 covers only supplies of goods, and processing services carry ordinary VAT.

How do I know whether a product is on the list?

By its Combined Nomenclature code: if the heading is in Annex 7, the rule applies. The manufacturer or supplier usually gives the CN code.

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