Managing Latvia’s tax rules can feel overwhelming for foreign companies operating a branch or office in the country. Understanding when you can recover VAT is especially important for managing cash flow and staying compliant. 

This guide breaks down the Latvia VAT refund process, helping businesses identify eligibility, required documents, and the steps to claim successfully.

Key Highlights

  • Understand who qualifies to claim a Latvia VAT refund, including foreign companies with a registered branch and fixed establishment.
  • Learn when to apply, required timelines, and how to submit refund claims in Latvia.
  • Identify which business expenses are eligible or excluded under Latvia’s VAT rules to avoid rejected claims.
  • Follow a clear, step-by-step process for domestic entities and non-resident businesses seeking VAT recovery in Latvia.

Understanding VAT in Latvia

Value Added Tax (VAT) in Latvia is a consumption-based tax similar to GST or sales tax, applied at multiple stages of the supply chain. 

  • The standard VAT rate is 21%, with reduced rates of 12% for selected essentials and 5% for books and magazines. 
  • Certain transactions, such as exports, intra-Community supplies, and foreign-aid-funded services, qualify for a 0% rate.
  • Services like education, financial, and medical care are exempt.

Registered businesses can offset output VAT against input VAT, enabling them to recover excess tax through a VAT tax refund, usually when filing the VAT return. Filing frequency depends on turnover and whether intra-Community supplies are made, ranging from monthly to twice-yearly returns.

All filings must be submitted electronically to the State Revenue Service (Valsts ieņēmumu dienests), which oversees the Latvia VAT refund process and other tax-related regulations.

Who Can Claim a VAT Refund?

Eligibility for a Latvia tax refund on VAT depends on a business’s registration status, place of establishment, and the nature of its activities.

  • VAT-Registered Domestic Businesses: Local companies registered for VAT may claim a refund when input VAT exceeds output VAT for a given period. To qualify, the business must meet all input tax deduction rules, such as holding valid invoices and using the purchases for taxable activities. When conditions align, the resulting surplus can be reclaimed through the regular Latvia VAT refund process.
  • Non-Resident EU Businesses: Businesses established in another EU Member State, but not required to register for VAT in Latvia, can recover Latvian VAT paid on local purchases or imports. The refund is available when the expenses support their taxable activities elsewhere in the EU.
  • Non-EU Businesses (Reciprocity Countries): Companies based outside the EU may also claim refunds, provided they operate under reciprocity arrangements. Latvia currently grants refunds to businesses established in Norway, Switzerland, Iceland, Monaco, the United Kingdom, and Bosnia and Herzegovina. These claims apply to VAT charged on goods and services acquired in Latvia or on imports used for taxable activities abroad.

By understanding these eligibility rules, businesses can better determine their refund rights and recover VAT efficiently under Latvia’s tax framework.

When Can Latvian Businesses Claim a VAT Refund?

Latvian VAT rules allow businesses to claim a refund whenever their input VAT exceeds output VAT, creating a surplus. By default, this surplus is carried forward to future periods to offset further VAT liabilities. 

However, VAT-registered businesses may request a VAT refund in Latvia by indicating this preference directly on their monthly or quarterly VAT return instead of allowing the credit to roll over. These applications must be filed within nine months after the close of the calendar year in which the VAT was incurred.

The process is slightly different for EU-based businesses and non-EU businesses operating in Latvia.

  • EU-Registered Businesses: Companies established in another EU Member State can recover Latvian VAT by submitting an electronic claim through their home country’s portal. The application must be filed no later than 30 September of the year following the period in which the VAT was incurred. Once approved, Latvia issues the refund, partial or full, within ten days of its decision.
  • Non-EU Businesses: Non-EU companies eligible under reciprocity must file the dedicated Latvian refund form by 30 September of the year following the refund period. Payments are released within ten working days after the authorities confirm the claim.

These deadlines ensure that foreign and domestic businesses can efficiently manage their cash flow under the Latvia VAT refund framework.

What Can You Claim?

To understand how a VAT refund works, businesses should start by learning which expenses qualify for recovery. Latvia allows a broad range of business-related costs to be included in a refund claim, provided they support taxable activities.

Common refundable expenses for Latvian-registered businesses:

  • Office operations: Rent, utilities, internet, and workplace maintenance costs.
  • Business purchases: Computers, machinery, office equipment, and other capital goods.
  • Travel and accommodation: Hotel stays, transport, and employee travel within Latvia.
  • Professional activities: Fees related to training, exhibitions, trade fairs, and industry events.
  • Imports: VAT paid on goods brought into Latvia for business use.

Eligible Costs for Overseas Claimants

Foreign EU and qualifying non-EU businesses can claim VAT on expenses directly connected to their activities abroad, including:

  • Local supplier invoices supporting taxable operations outside Latvia.
  • Conference, seminar, and event participation fees.
  • Marketing and promotional spending incurred during business visits or campaigns.

These cost categories help companies maximize their Latvia VAT refund potential while maintaining compliance with national rules.

What Expenses Are NOT Eligible for a VAT Refund in Estonia?/What’s Not Covered?

Certain costs cannot be reclaimed because they relate to activities that are exempt from VAT under Latvian law. These exemptions, often referred to as nongenuine exemptions, mean that no VAT is charged on the output, and therefore no input VAT deduction is permitted. 

Businesses operating exclusively or participating in the following sectors generally cannot benefit from a Latvia VAT refund on related expenses:

  • Medical and healthcare services
  • Education and training
  • Financial and insurance services
  • Residential property leasing
  • Postal services
  • Many cultural and nonprofit activities

Because these areas fall outside the scope of taxable activities, any VAT incurred on purchases directly linked to them becomes non-recoverable.

Examples of Non-Refundable Expenses:

  • Costs tied to exempt service delivery (e.g., financial advisory tools for a bank)
  • VAT on residential leasing, maintenance, or renovation
  • Event or cultural activity expenses when tied to exempt operations

Understanding these exclusions helps businesses avoid incorrect claims and maintain compliance.

Are Non-Latvia Businesses Eligible for a VAT Refund?

Yes, foreign companies can claim a Latvia VAT refund under specific refund schemes, depending on whether they are EU- or non-EU–established.

EU Businesses (Directive 2008/9/EC):

  • Eligible if they don’t have a VAT registration or fixed establishment in Latvia, and only make reverse-charge or exempt supplies there.
  • File electronically via their home country’s tax authority portal.
  • Required documents include a certificate of taxable status, detailed original invoices, import papers, and proof of payment, among others.

Non-EU Businesses (13th Directive / Reciprocity Agreements):

  • Eligible only if their country has a reciprocal VAT-refund agreement with Latvia.
  • These companies should not have carried out taxable operations in Latvia that require VAT registration.
  • Applications are in the form of a hard copy along with a “certificate of taxable status” (issued by their home tax authority), original invoices, and proof of payment.

These requirements ensure that both EU and non-EU businesses can manage VAT recovery while meeting Latvian and EU laws.

Step-by-Step: Reclaiming VAT for Latvian Businesses

Reclaiming VAT in Latvia is a straightforward, well-defined process designed to help businesses recover eligible input tax efficiently. While the exact filings may differ for local and foreign entities, the overall workflow remains consistent.

The steps below outline how to claim a VAT refund online in Latvia:

  1. Confirm your VAT registration status: Before initiating a claim, make sure your Latvian VAT registration is active and up to date. Only registered taxpayers can deduct input VAT or request repayments.
  2. Review and validate deductible expenses: Check that your costs are eligible, such as operational, travel, or procurement-related expenses, and ensure they directly relate to taxable business activities.
  3. Prepare your refund application or periodic VAT return: Domestic businesses submit refund requests through their monthly or quarterly VAT returns in Latvia’s Electronic Declaration System (EDS).
  4. Upload required invoices and documents: Attach digital copies of invoices, import declarations, proof of payment, and your certificate of taxable status. All documents must contain the mandatory data fields recognized under EU VAT rules.
  5. Submit within the official deadline: Late submissions are rejected, so always file within the applicable claim window.
  6. Monitor your application and respond promptly: Track the status of your claim through the relevant portal. The tax authority may request clarifications or additional documents, especially for claims involving cross-border transactions. 

Following these steps ensures a smooth and compliant refund process for businesses operating in Latvia.

Step-by-Step: Reclaiming VAT for Overseas Businesses

Foreign companies can reclaim Latvian VAT through structured refund schemes governed by the EU Refund Directive (2008/9/EC) for EU businesses and the 13th Directive for non-EU applicants.

The following steps clarify how to get a VAT tax refund as a non-Latvian business:

  1. Check refund eligibility and reciprocity: Confirm that Latvia allows refunds for your country. EU businesses qualify automatically under the 2008/9/EC rules, while non-EU claimants must fall under Latvia’s reciprocity arrangements.
  2. Complete the correct VAT refund form: EU businesses must file electronically through their home country’s tax authority portal using the EU VAT Refund system. Non-EU applicants must use Latvia’s designated 13th Directive form, commonly referenced as Form 65A (Application for VAT Refund to a Taxable Person Not Established in the EU). Countries like the UK reference these submissions under VAT Notice 723A.
  3. Gather and attach company documents: Submit all required materials, including a certificate of taxable status, original invoices with mandatory EU-compliant details, import declarations, and proof of payment. Some countries require notarized or certified copies.
  4. Submit through the correct channel: EU claims must be filed online through the claimant’s national tax authority portal. Non-EU claims may be sent electronically where allowed, or by postal submission directly to the Latvian State Revenue Service (SRS).
  5. Track progress and receive payment: Refunds are processed once Latvia’s tax authority verifies the claim. Applicants may receive follow-up requests for clarification before receiving their Latvia VAT refund.

A well-prepared application, backed by complete documents and timely submission, ensures your Latvia VAT refund process moves smoothly.

Documentation and Compliance Checklist

Use this checklist to ensure your Latvia VAT refund documents are complete and fully compliant:

  • VAT-compliant invoices with supplier VAT number
  • Clear description of goods/services and VAT charged
  • Proof of payment (bank statements, receipts, remittance slips)
  • Company registration certificate
  • VAT registration certificate from your home jurisdiction
  • Certificate of taxable status from your tax authority
  • Power of attorney if a representative files on your behalf
  • Contracts or agreements supporting the expense
  • Import/export paperwork for cross-border transactions
  • Transport documents (CMR, airway bill, delivery notes)
  • Credit notes linked to original invoices
  • Bank account details for refund transfers
  • Evidence showing the business use of expenses
  • Previous refund decisions, if applicable
  • Translations into Latvian/English when required
  • Digital copies prepared in approved formats (PDF, XML, etc.)

How to Stay VAT-Compliant With Your Paperwork

Staying organized is key to securing a smooth Latvia VAT refund process. Follow these best-practice guidelines to keep your records clean, compliant, and audit-ready:

  • Maintain digital copies of all invoices, contracts, and proof of payment in secure cloud storage.
  • Retain records for the statutory period (generally 10 years for Latvia).
  • Ensure invoices meet mandatory data requirements: supplier VAT number, invoice date, description of goods/services, taxable amount, and VAT charged.
  • Use e-invoicing where required, and keep the corresponding XML or structured data files.
  • Create a clear audit trail, linking invoices to payments, contracts, and business activities.
  • Standardize document naming and folder structures for quick retrieval during checks.
  • Monitor tax authority updates on format changes, e-reporting, or e-invoicing mandates.
  • Back up files regularly on multiple encrypted drives or services.
  • Review documents before submission to ensure accuracy and consistency.

These practices help protect your business during audits and streamline future refund claims.

How Commenda Handles Global VAT Refund Filings

Managing VAT recovery across multiple jurisdictions can be complex, especially when each country has different rules, documentation standards, and audit expectations. Commenda simplifies this by providing end-to-end support for businesses seeking a smooth, compliant VAT reclaim process.

Key benefits of working with Commenda:

  • Centralized VAT Documentation: Commenda’s platform stores invoices, certificates, and supporting records securely, ensuring nothing is missing for your Latvia VAT refund or any other jurisdiction.
  • Global Indirect Tax Expertise: Our team handles EU and non-EU refund frameworks, monitors regulatory changes, and ensures every claim aligns with the required directives.
  • Automated Compliance Workflows: From tracking deadlines to managing nexus and validating invoice formats, Commenda reduces manual effort and minimizes compliance risks.
  • Cross-Border Filing Capability: Whether reclaiming VAT within Europe or beyond, Commenda manages multi-country submissions through a unified, audit-ready process.

By combining automation with expert oversight, Commenda helps businesses recover more VAT with fewer errors. The result is a faster, more reliable refund experience tailored to the needs of global companies.

Book a free demo today and discover how Commenda can streamline Latvia VAT filing for your business.

FAQs

Q. Who is eligible to claim a VAT refund in Latvia?

Foreign and domestic VAT-registered businesses can claim refunds if they incur deductible expenses related to taxable activities and meet Latvia’s documentation rules.

Q. How long does it take to receive a Latvia VAT refund?

Processing times vary, but most claims are reviewed within weeks after submission, provided all documents are accurate and complete.

Q. Can non-EU businesses apply for a refund?

Yes. Non-EU businesses can claim VAT under reciprocity rules or the 13th Directive, as long as they supply the required forms and certificates.

Q. What expenses are typically refundable?

Examples include office expenses, travel, events, supplier invoices, and imports, so long as they directly relate to taxable business activity.

Q. What happens if my claim is incomplete or incorrect?

The tax authority may request clarifications or additional documents. Delays occur if errors aren’t corrected promptly, so careful preparation is essential.