VAT Registration in Latvia: What Foreign Businesses Need to Know

Expanding your business into Latvia can be a strategic step for entering the European Union market. Latvia offers strong logistics infrastructure, EU membership, and an efficient business environment that attracts e‑commerce companies, trading businesses, digital service providers and international groups.

However, one of the most critical, and often misunderstood, areas during market entry is VAT compliance.

Foreign businesses frequently assume that VAT registration is only required after reaching certain turnover thresholds or that OSS registration fully replaces local VAT obligations. In practice, Latvian VAT legislation follows a different logic.

At Oceans, we work daily with international companies establishing presence in Latvia, and we see the same risks repeating: delayed VAT registration, incorrect OSS assumptions and exposure to penalties.

This article explains the VAT registration framework in Latvia in a clear, practical way, based on official legislation and regulatory guidance, and outlines how professional support can significantly reduce compliance risks.

When is VAT registration required in Latvia?

Under Latvian VAT law, a foreign company must register for VAT before starting taxable activity in Latvia.

This obligation applies regardless of:

• the country where the company is incorporated,
• expected turnover,
• use of marketplaces or intermediaries,
• intention to use the OSS scheme.

The decisive factor is not the company’s location - it is where the economic activity takes place.

If taxable transactions occur in Latvia, VAT registration becomes mandatory.

Warehouse and fulfilment activities

One of the most common VAT triggers for foreign companies is the storage of goods in Latvia.

If products are stored in:

• local warehouses,
• third‑party logistics centres,
• fulfilment providers,
• consignment stock arrangements,

then the foreign business is considered to be performing taxable activity in Latvia.

In such cases, VAT registration is required before goods are placed in the warehouse, not after sales begin.

This rule applies equally to EU and non‑EU companies.

Is there a VAT registration threshold for foreign companies?

Latvian VAT legislation provides a turnover threshold for local companies. However, this threshold does not apply to foreign taxable persons.

In practice, this means that foreign businesses often must register for VAT from the first taxable transaction.

This is one of the most frequent compliance gaps encountered during international expansion.

VAT registration vs OSS: understanding the difference

The One‑Stop Shop (OSS) scheme is designed to simplify reporting of cross‑border EU B2C sales.

However, OSS:

• does not replace local VAT registration,
• does not remove obligations arising from stock held in Latvia,
• does not depend on warehouse location.

OSS can usually be registered in the company’s EU Member State of establishment, while Latvian VAT registration remains mandatory when taxable activity occurs in Latvia.

In many structures, companies are required to maintain both Latvian VAT registration and OSS reporting simultaneously.

VAT registration process in Latvia

VAT registration is performed through the Latvian State Revenue Service (VID) using the Electronic Declaration System.

The process typically involves:

• assessment of planned activities,
• submission of a VAT registration application,
• supporting documentation (contracts, logistics agreements),
• communication with the tax authority.

Processing time depends on the complexity of operations and the clarity of documentation.

Why professional VAT support matters

Latvian VAT compliance involves national legislation, EU VAT directives and formal communication with authorities in Latvian.

For foreign companies, professional support helps:

• ensure correct registration timing,
• avoid retroactive VAT assessments,
• prevent penalties and interest,
• maintain compliant ongoing reporting.

At Oceans, we act as a local compliance partner for international businesses, supporting VAT registration, accounting and ongoing reporting - allowing management to focus on growth rather than regulatory risk.

How Oceans supports foreign businesses

Oceans supports international companies entering Latvia with:

• VAT registration and compliance setup,
• ongoing VAT reporting,
• coordination of OSS reporting,
• accounting and statutory support,
• communication with Latvian authorities.

Our role is to ensure that your Latvian operations are structured correctly from day one - transparently, compliantly and efficiently.

If you are planning to establish presence in Latvia or already operate locally, our team is ready to support you.

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