Latvia ERP and accounting: e-invoicing 2028, VID, VAT

Latvian compliance in one view

Latvia is phasing in structured e-invoicing through its Accounting Law. E-invoices have been mandatory for invoices to public bodies since 1 January 2025, their data has gone to the State Revenue Service (VID) since 1 January 2026, and all B2B invoices follow from 1 January 2028 after a two-year postponement. It matters because 2028 changes how every Latvian company invoices.

Tax administration is national. VID administers VAT, corporate and personal income tax, social insurance contributions and customs, and taxpayers deal with it through the Electronic Declaration System (EDS). Taxes are paid into a single tax account, and the e-invoicing rules themselves sit in the Accounting Law, which the Ministry of Finance steers.

This page explains why Latvia is making the change, how e-invoices move and reach VID, every dated step as of September 2026 including the postponement, and what Skyline Nexus ERP does for a Latvian business.

• Tax authority: VID, through EDS
• Currency: euro; standard VAT rate 21%
• E-invoicing: B2G since 2025; B2B from 1 January 2028
• Format: XML to Peppol BIS Billing 3.0 and EN 16931
• Accounting Law in force since 1 January 2022

Why Latvia is moving to structured e-invoices

The first reason is the VAT gap: the difference between the VAT a country should collect and what it actually collects, which the European Commission estimates every year for each member state. When invoice data reaches the tax authority in a structured form, the seller's output VAT and the buyer's deduction can be matched transaction by transaction, and invoices that exist on only one side stand out. VID publishes its own work on tax gaps, and e-invoice data is one of the most direct ways to narrow them.

The second reason is efficiency. A structured invoice can be read by the buyer's accounting system without retyping, which cuts processing costs and errors, and it gives the state reliable data for pre-filled declarations and faster refunds. The Ministry of Finance built the rules into the Accounting Law, so they apply to everyone who keeps books, not only VAT payers.

The third reason is Europe. Under the VAT in the Digital Age package (ViDA), EN 16931 e-invoices and digital reporting become the norm for intra-EU B2B trade from 1 July 2030. By adopting the same European standard and the Peppol BIS format domestically, Latvia avoids building one system in 2028 and another in 2030.

How a Latvian e-invoice moves and reaches VID

A Latvian e-invoice is prepared, sent and received in a structured, machine-readable format that allows automatic processing. The file is XML, its structure is defined in the Latvian national standard, and it must comply with Peppol BIS Billing 3.0, following the 2020 refined version of EN 16931. VID recommends checking files with the European Commission's e-invoice validation tool and publishes instructions for doing so.

There is no single central platform. Businesses choose how to send and receive: through the official e-address, the personalised mailbox on Latvija.gov.lv used for official communication with the state, or through a commercial e-invoice service provider. Operators that want to integrate with the e-address solution work with the State Digital Development Agency. VID then receives the e-invoice data from the e-address system, from service providers, or from the taxpayer directly, either as an XML upload in EDS or through an API from the accounting software. Under Cabinet Regulation No. 749 of 9 December 2025, each e-invoice is submitted to VID once, no later than five working days after the day it was sent.

Latvian businesses may also send structured e-invoices to customers abroad by agreement. The obligation, however, concerns the public administration and Latvian-registered companies, including self-employed individuals and the other persons covered by the Accounting Law and the VAT Law.

• Format: XML, Peppol BIS Billing 3.0, EN 16931 (2020 refined version)
• Channels: official e-address on Latvija.gov.lv or a commercial service provider
• Data to VID: from the e-address, from providers, or uploaded in EDS or via API
• Validation: the European Commission's e-invoice checking tool

Deadlines: every dated step, including the postponement

The dates below come from VID's e-invoice page, updated on 25 September 2026, the Ministry of Finance's e-invoicing page and the European Commission's country page. They describe the position as of September 2026.

The key change is the postponement. The Accounting Law amendments adopted by the Saeima on 31 October 2024, in force from 1 January 2025, originally made B2B e-invoicing mandatory from the start of 2026. Further amendments adopted on 5 June 2025, in force from 12 June 2025, moved the start of mandatory e-invoicing between companies to the start of 2028. Businesses that prepared for 2026 did not waste the work: B2B e-invoices can be exchanged now, and e-invoice data can be sent to VID voluntarily from 2026.

• 1 January 2025: e-invoices mandatory between public administration and Latvian businesses (G2G, B2G and G2B)
• 1 January 2026: contracts signed before 31 December 2024 lose their deferral, and e-invoice data in G2G, B2G and G2B flows must reach VID
• 1 January 2026 to 31 December 2027: voluntary submission of B2B e-invoice data to VID
• 1 January 2028: B2B invoices must be e-invoices, passed to VID when issued
• 1 July 2030: EU-wide e-invoicing and digital reporting for intra-EU B2B supplies under ViDA

VAT rates, periods and filing

Latvia's standard VAT rate is 21%. The 12% rate applies to medicines and medical devices as defined in Article 42 of the VAT Law, specialised foods for infants, domestic scheduled passenger transport and luggage, accommodation in tourist accommodation, firewood and heat supplied to households, and fresh fruit, berries and vegetables that are washed, peeled, cut or packed but not otherwise processed, as well as bread, milk, poultry meat and eggs. The 5% rate covers books, brochures and similar printed matter, newspapers and magazines. VID's rate page was last updated on 2 July 2026.

The tax period is a calendar month when taxable transactions exceeded 50,000 euro in the previous or current year, when the business supplies goods within the EU or provides services to taxable persons in other member states, and for VAT groups and fiscal representatives. A newly registered business also stays on monthly periods for its first six months. Otherwise, a business below 50,000 euro can use a quarterly period. Returns are filed electronically in EDS.

• 21% standard rate
• 12% reduced rate: medicines, accommodation, passenger transport, fresh produce, bread, milk, poultry, eggs
• 5% reduced rate: books, newspapers and magazines
• Monthly period above 50,000 euro of taxable transactions

Accounting framework, annual reports and records

Bookkeeping is governed by the Accounting Law, which replaced the law On Accounting on 1 January 2022, and by Cabinet Regulation No. 877 of 21 December 2021 on bookkeeping. The books must give timely, relevant, understandable and complete information, and income and expenses must be allocated to the right reporting periods. The e-invoicing obligations are part of the same law.

Annual financial statements follow the Law on Annual Financial Statements and Consolidated Financial Statements, which sorts companies by size; listed groups prepare consolidated accounts under IFRS as adopted in the EU. VID and the Ministry of Finance publish a handbook of accounting organisation documents for small companies, including sample accounting policies.

The head of the company is responsible for bookkeeping and for keeping the originals, copies or data images of all documents that evidence transactions, for the periods the Accounting Law and its regulations set. Since 1 July 2021 outsourced accounting may only be provided by licensed providers, so a company that uses an external bookkeeper should check the licence.

Payroll and social insurance

VID collects both personal income tax withheld from wages and mandatory state social insurance contributions, and employers report payroll to VID through EDS. Each employee keeps an electronic payroll tax book (algas nodokļa grāmatiņa), in which they name their main place of income, so that the employer applies the non-taxable minimum and reliefs for dependants and disability; without it, the reliefs are not applied during the year and can only be recovered in the annual declaration.

The State Social Insurance Agency pays pensions and benefits. For 2026 the non-taxable minimum for pensioners is 12,000 euro a year, 1,000 euro a month, applied automatically to pensions; a working pensioner who gives the payroll tax book to the employer has it split between pension and salary. For the ledger, a monthly payroll journal with separate liabilities for income tax and social insurance, reconciled to the single tax account, is the core control.

Cities and regions: where the rules differ

VAT, e-invoicing, income tax and social insurance are national, so a business in Riga, Daugavpils, Liepāja, Jelgava, Jūrmala, Ventspils, Rēzekne, Valmiera or Ogre invoices and files under the same rules. There is no regional e-invoicing regime.

The differences are local and specific. Municipalities set real estate tax rates within the limits of national law, so property costs vary by location. Latvia also has free ports and special economic zones, including the free ports of Riga and Ventspils and the special economic zones in Liepāja and Rēzekne, where companies that sign an agreement with the zone authority can receive direct tax relief under separate laws. A group with an operating company inside a zone and another outside it needs to keep the two companies' books clearly apart.

• Real estate tax: rates set by municipalities
• Free ports and special economic zones: Riga, Ventspils, Liepāja, Rēzekne
• VAT, e-invoicing and payroll: identical nationwide

How Skyline Nexus ERP handles Latvian requirements

Skyline Nexus ERP is a cloud ERP with a double-entry general ledger under Fiscal Authority. With the auto-post switches on, final sales, purchases, payments, expenses and depreciation post balanced journals in the background, and output VAT is computed per line on the same basis as the tax report, so 21%, 12% and 5% lines each post correctly. The VAT Return screen prefills tax-exclusive sales and purchase bases and VAT for a date range and location, ready for the declaration in EDS, and the chart of accounts can be imported from CSV or Excel to load a Latvian chart.

Controls match what the Accounting Law expects of the head of the company: posted journals are reversed rather than edited, sales returns are recorded as credit notes, fiscal periods can be soft-closed or locked, and the Accounting Audit Trail records who changed what, with old and new values. Business locations carry their own invoice numbering and branch-filtered reports, and the Audit Pack exports a year's ledger, journals, sales, purchases and VAT summary to one Excel workbook for the archive.

National e-invoicing connectors are being rolled out market by market, and Latvia's Peppol BIS e-invoice with VID reporting is part of that programme: tell us your country and we will confirm your go-live date ahead of 1 January 2028. For invoices to public bodies today, the working route is Skyline Nexus ERP alongside a commercial e-invoice service provider, with a partner-led integration reading sales and sales returns through the Skyline Nexus ERP Connector REST API. Latvian payroll runs in local payroll software or through a payroll partner, with the payroll journal posted to the ledger each month.

Rates, regimes and deadlines in this summary change, and many countries are actively legislating on e-invoicing. This is general information, not tax or legal advice — confirm the current position with the authority named above or with your tax adviser before you rely on it.