A foreign company should assess cases where there is an obligation to register with the Latvian Value Added Tax Taxable Persons Register even if there is no branch, representative office or other form of business registered in Latvia.
A person established in another EU member state (as well as a company from a third country) is required to register a VAT number in Latvia if the following conditions are met (Section 60 of the Value Added Tax Law):
If a taxable person of another member state supplies goods to a person who does not have a VAT number in Europe or is a non-registered taxable person, and such goods are assembled or installed inland, then such taxable person of another member state prior to carrying out the transaction shall register with the State Revenue Service Value Added Tax Taxable Persons Register regardless of the value of assembled or installed goods.
A taxable person of another member state shall register with the State Revenue Service Value Added Tax Taxable Persons Register in case of distance selling of goods:
a) within 30 days from the time when the total value of supplies of goods in the previous or current calendar year has reached or exceeded EUR 35,000; It is also possible to register before reaching the registration threshold mentioned;
b) prior to carrying out the transaction, if such goods are supplied which are subject to excise duty inland regardless of the value of the excisable goods supplied.
If an inland fixed establishment of a taxable person of another member state gets involved in supply of goods or services of such person inland, it shall register a VAT number in Latvia prior to carrying out such transactions. Fixed establishment — any place other than a place of establishment of a business of a person which is characterised by sufficient degree of permanence and suitable structure in terms of human and technical resources enabling to ensure services provided thereby or to receive and use services which are provided for the needs of such fixed establishment;
Under Section 10 of the Value Added Tax Law, distance selling of goods is supply of goods where a supplier of goods or a third person on behalf of the supplier of goods dispatches or transports goods from one member state to another member state if all of the following conditions are met:
1) the recipient of goods does not have a VAT number in Europe, it is a non-registered taxable person of another member state, or a non-taxable person;
2) the goods supplied are neither new means of transport nor goods intended for assembly or installation;
3) the total value (exclusive of tax) of the goods supplied in the previous or current calendar year has reached or exceeded the registration threshold in the taxable persons register laid down in the relevant member state, or the supplier of goods has chosen to register, for the purposes of distance selling, in the taxable persons register of the relevant member state before reaching the registration threshold, or the goods supplied are excisable goods.
These distance selling conditions shall not apply to supplies of second-hand goods, works of art, collector's items or antiques subject to tax in accordance with the special tax application arrangement.
The VAT number in Latvia must be registered with the State Revenue Service (SRS) within 10 business days. A foreign company is obliged to submit a VAT report to the SRS and pay the tax to the budget of Latvia, if any should be applied.
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Euroaudit is your Representative in Latvia providing tax consultancy, accounting and legal person registration services. Please contact our specialists by phone +371 25900918 or e-mail: info@euroaudit.lv