Timber invoices in Latvia with the domestic reverse charge

For supplies of timber and timber-related services in Latvia between VAT-registered businesses, the customer pays the VAT (Section 141(1) and (2) of the Latvian VAT Act). The invoice shows the value without VAT and the words “nodokļa apgrieztā maksāšana” (reverse charge), with no rate or VAT amount; 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 “R1” in part I of VAT 1.
Legal basis
Latvian VAT Act, Section 141

Sample invoice

SIA “Parauga Kokzāģētava”
Invoice No. KZ-2026/214
Date of issue
25/09/2026
Due date
09/10/2026
Supplier SIA “Parauga Kokzāģētava” Reg. No. 40000000021 VAT No. LV40000000021 Parauga iela 21, Madona, LV-4801
Customer SIA “Parauga Koka Nami” Reg. No. 40000000022 VAT No. LV40000000022 Parauga iela 22, Cēsis, LV-4101
DescriptionQtyUnitUnit price excl. VATAmount excl. VAT
Pine sawn timber 50 × 150 mm24m³265.006,360.00
Timber drying24m³18.00432.00

Nodokļa apgrieztā maksāšana / Reverse charge (Latvian VAT Act, Section 141)

Total excl. VAT
6,792.00 EUR
Total due
6,792.00 EUR
A specimen with made-up companies, numbers and amounts.

Which timber (Section 141(3))

  • Felled and delimbed round wood, barked or not, longer than one metre with a top diameter of at least three centimetres.
  • Sawn timber of any length, planed or not, thicker than six millimetres and made of one piece with no artificial joints.
  • Firewood as logs, billets, branches or bundles.
  • Wood chips and shavings, sawdust and wood residues.
  • Briquettes and pellets of sawdust and wood residues meant as fuel.

Which services (Section 141(4))

  • Preparing timber: granting felling rights, marking out, measuring standing trees and logs, valuation, felling, delimbing, stacking.
  • Processing: sawing, barking, milling, planing, drying, gluing, varnishing, chipping.
  • Marking, grading, sorting, packing and chemical treatment such as antiseptic treatment.
  • Transport, loading, unloading, reloading and storage.
  • Marketing and brokerage connected with timber supplies.

When the rule applies

  • The supply takes place in Latvia and both parties are VAT registered (Section 141(1) and (2)).
  • Firewood and pellets sold to a household are outside it: they take the 12% rate (Section 42(11)).
  • Finished products such as furniture or glued structures made of several pieces are not on the list.

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 141(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 141(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 “R1”.
  • 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 Council Implementing Decision 2009/1008/EU, extended by Implementing Decision (EU) 2024/3207 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

  • Invoicing firewood to a private person without VAT. A household pays 12% VAT; the reverse charge does not apply.
  • Adding 21% VAT to a timber haulage invoice, although transport is a Section 141(4) service.
  • Printing “VAT 0%”. The rate and amount are left off entirely.
  • Accepting cash, although payment must be non-cash.

Frequently asked questions

Does the reverse charge apply to timber in Latvia?

Yes: to round wood, sawn timber, firewood, chips, shavings and pellets, and to preparing, processing, transporting and storing them, when both parties are VAT registered (Latvian VAT Act, Section 141).

Is timber haulage reverse-charged?

Yes. Transporting, loading, unloading and storing timber are services listed in Section 141(4).

How do I invoice firewood to a household?

With 12% VAT when it is bought for household use (Section 42(11)). The reverse charge applies only between VAT payers.

How long does the timber reverse charge last?

The Latvian VAT Act sets no end date, but the EU authorisation for Latvia (Implementing Decision 2009/1008/EU) runs until 31 December 2026.

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.

Create a free account

Sources