Latvia Tax Agency Clarifies Rules on Applying Simplified VAT Reporting Regime

The Latvian State Revenue Service Feb. 3 issued Ruling No. P005-17/8.6.1/4569, clarifying rules for applying the simplified VAT reporting regime for companies with taxable transactions comprising under 5 percent of total transaction value. The taxpayer, a medical services provider, had 1 percent taxable revenue in 2025 and inquired whether it could apply the simplified regime to allow recording and 2026 reporting of only taxable transactions. Upon review, the Tax Agency found that: 1) the regime can be applied if, for input VAT deduction purposes, a taxpayer maintains a separate record of goods and services used only for transactions that gave ...