Scrap metal invoices in Latvia with the domestic reverse charge

For supplies of scrap metal and scrap-related services in Latvia, the customer pays the VAT when both parties are VAT registered and the customer holds a scrap purchasing licence or a pollution or waste management permit (Section 143(1) and (2) of the Latvian VAT Act). The invoice shows the value without VAT and “nodokļa apgrieztā maksāšana”; 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 “R2” in part I of VAT 1.
Legal basis
Latvian VAT Act, Section 143

Sample invoice

SIA “Parauga Serviss”
Invoice No. PS-2026/019
Date of issue
22/09/2026
Due date
06/10/2026
Supplier SIA “Parauga Serviss” Reg. No. 40000000031 VAT No. LV40000000031 Parauga iela 31, Liepāja, LV-3401
Customer SIA “Parauga Metāls” Reg. No. 40000000032 VAT No. LV40000000032 Parauga iela 32, Liepāja, LV-3402
DescriptionQtyUnitUnit price excl. VATAmount excl. VAT
Ferrous scrap3.42t210.00718.20
Aluminium scrap0.38t1,150.00437.00

Nodokļa apgrieztā maksāšana / Reverse charge (Latvian VAT Act, Section 143)

Total excl. VAT
1,155.20 EUR
Total due
1,155.20 EUR
A specimen with made-up companies, numbers and amounts.

Which goods (Section 143(3))

  • Ferrous and non-ferrous metal waste and scrap and their alloys, from industry, construction, agriculture or households.
  • Metal products or parts that cannot serve their purpose because of breakage, cutting, wear or another reason.
  • End-of-life vehicles and their parts, including car wrecks.
  • Waste electrical and electronic equipment.
  • Batteries and accumulators.

Which services (Section 143(4))

  • Separating metal waste from industrial and household waste streams.
  • Sorting, dismantling, cutting, compacting, pressing and casting scrap into ingots.
  • Breaking up, dismantling, cutting and pressing worn metal products.
  • Breaking up, dismantling and sorting metal structures of disused buildings and infrastructure.

When the rule applies

  • Both parties are VAT registered in Latvia.
  • The customer holds a licence to buy metal waste and scrap or, failing that, a category A or B pollution permit or a waste collection, transfer, sorting and storage permit (Section 143(1), point 2).
  • If either condition fails, ordinary VAT applies.

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(5) and (7)).
  • 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(9)). 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 “R2”.
  • 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.

Common mistakes

  • Not checking the customer’s licence or permit. Without it the reverse charge cannot apply.
  • Printing “VAT 0%” and a 0.00 VAT amount.
  • Putting scrap and usable goods on one line. Usable products carry ordinary VAT.
  • Settling in cash.

Frequently asked questions

Does the reverse charge apply to scrap metal in Latvia?

Yes, when both parties are VAT registered and the buyer holds a scrap purchasing licence or a suitable permit (Latvian VAT Act, Section 143).

Are old batteries and car wrecks scrap for VAT?

Yes. Batteries, accumulators, end-of-life vehicles and their parts are on the Section 143(3) list.

What must a scrap metal invoice say?

The buyer’s VAT number, the value without VAT and “nodokļa apgrieztā maksāšana”. No VAT rate or amount.

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