When and How Can You Apply the 0% VAT Rate to Exports?

Many business owners know that exporting goods outside the EU can qualify for a 0% VAT rate, but not everyone realizes that poorly prepared documentation can lead to serious consequences.

What should you keep in mind?

To legally apply the 0% VAT rate, you must be able to prove that the goods:

• Have physically left EU territory
• Have been received by the foreign buyer
• The transaction complies with legal requirements (e.g., Article 7 of the VAT Law in Latvia)

Key supporting documents:

• Customs export declaration (IE599, EX1) with confirmation
• CMR or other transport documents (e.g., Air Waybill for air shipments)
• Invoice indicating application of the 0% VAT rate
• Sales contract with the buyer (if applicable)
• Additional proof – payment confirmations, warehouse documents, etc.

If the documentation is incomplete or incorrect, the tax authority (VID) may charge 21% VAT, along with penalties and late payment interest.

Our tip for business owners and finance teams:
It’s not just about knowing the VAT rules — it's crucial to set up an internal documentation system that prevents mistakes.

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