Regulatory updates - Latvia

On 12 November 2024, the amendments to the Accounting Law were promulgated, confirming the introduction of the electronic invoicing obligation in the country.

The timelines remain the same as previously reported, i.e.:

• 1 January 2025 - B2G e-invoicing will be mandatory for resident companies in Latvia to the listed state budget entities and G2G and G2B invoices from budget entities.

Point nine in the amendment addresses a transition period until 1 January 2026 for submitting e-invoices for B2G contracts signed by 31 December 2024.

• 1 January 2026 - B2B e-invoicing and invoice data reporting to the State Revenue Service (SRS) become mandatory.

Rules for B2B e-invoices and reporting invoice data to the SRS should be announced in May 2025.

Electronic invoices should comply with EU standards LVS EN 16931-1:2017 and LVS CEN/TS 16931-2:2017.

Resident businesses can manually upload single e-invoices through their e-address (e-adrese) on the government platform. It should also be possible to send the e-invoice directly from a specific business ERP to the e-address.

Businesses can verify if their public buyer is a budget entity on the Central Statistical Board’s website by entering the institution’s registration number or name. If the institution cannot be found by registration number or name, it does not meet the definition of a budget institution.

On 24 September, the Ministry of Finance (MoF) announced the Cabinet of Ministers’ (MK) support to mandate e-invoicing after their evaluation meeting, following the public consultation on the draft amendments of the Accounting Law published earlier this year.

The statement from MoF reconfirms the previously announced timelines:

• 1 January 2025 – Mandatory e-invoicing in the G2G and B2G sector (invoices to budget organisations);
• 1 January 2026 – Mandatory e-invoicing in the B2B sector, along with expected obligatory submission of e-invoice data to the State Revenue Service (SRS), utilizing the decentralized CTC model.

Additionally, the draft law foresees that regulations concerning e-invoice distribution channels will be developed and that B2C invoices are not within the scope of the mandate.

The draft law is still subject to final approval by the Saeima (Parliament of the Republic of Latvia).

According to the draft law, the expected timelines are as follows:

• 1 January 2025 - All companies are expected to issue only e-invoices to budget entities (B2G);
• 1 January 2026 - All companies are expected to issue only e-invoices for transactions between private entities (B2B) and transfer e-invoice data to the State Revenue Service (Decentralized CTC model).

As per the project description, all businesses under Article 3 (Subjects of the Law) from the Accounting Law are under the scope of these requirements. 

In addition, the MoF intends to introduce Peppol as one of the options for e-invoice exchange. 

The draft law will be under public consultation until 7 June 2024. 

On 26 January 2024, the Latvian Ministry of Finance released the Shadow Economy Curtailment Plan (2024-2027) to thwart the shadow economy in the prioritized development of the economic sectors.

The four-year plan considers the mandatory introduction of Continuous Transaction Controls (CTC) model in the business sector by the end of 2025. The e-invoicing obligations will be implemented based on real-time reporting.

The technical solution for e-invoicing is still a work in progress. Meanwhile, the publication of further information is also expected.

On 12 October 2021, the Cabinet of Ministers revised and approved the informative report set by the Ministry of Finance on implementing an e-invoicing system. The key novelty of this report is the introduction of mandatory e-invoicing in the B2B and B2G segments starting from 2025.

The e-invoice exchange framework

The exchange of e-invoices will continue to follow the European Standard on e-invoicing. Peppol e-delivery network will be adopted as a single standard for sending and receiving e-invoices.

Current e-invoicing status in Latvia

At the moment, taxpayers in Latvia can issue and exchange invoices and other documents in any format, as the country follows the post-audit model in the B2B sector. However, on the B2G side, since April 2020, all contracting authorities in Latvia have been obliged to receive and process electronic invoices in public procurement as per the Directive 2014/55/EU.

There is no single mandatory infrastructure for e-invoice exchange in Latvia, but the following options are available for suppliers to public entities:

• Using the e-address - a tool for secure communication with Latvian public administrations
• Using the e-services and options provided by the city of Riga Municipality;
• To connect with the central government, suppliers can use the platform ePakalpojumi;
• Any other method based on agreement with trading parties.

To adopt the newly proposed e-invoicing framework in the country, the work on the regulatory procedures and technology practices is anticipated to start in the near future.

Read the official announcement in Latvian here.